When checking out a franchise, it is wise to talk to franchisees that own the franchise you are looking into. You want to be prepared with some questions to ask them. Here are some ideas for you.
First, you should ask if they are satisfied with their franchisor. Ask them to elaborate so you understand fully why they feel the way they feel.
Second, ask how long it took to see a return on investment. When you hear their answer, question yourself and whether or not you are willing or able to hold yourself afloat without profits from sales.
Third, ask what their approximate earnings are and ask if they are in line with their expectations. This is a tough question to ask, but it is really good for you to know what your future with this company will look like.
Fourth, ask whether or not the franchisor adequately estimated the amount of operating cash needed.
Fifth, ask whether or not the training that the franchisor provided was beneficial and thorough for them run the business.
Sixth, were there any unsaid franchise fees or unexpected costs? If so, what were they for?
Seventh, ask if their territory is big enough to meet their goals.
Eighth, ask if they are required to use the supplies that are provided by the franchisor. Are they restricted to get supplies elsewhere?
Ninth, ask if the franchisor advertises as much as they said they would. Do they see the result of how much money they pay for advertising?
Tenth, ask them what kind of experience, education, or skills did they have before going into the franchise. Did they feel ready?
These questions will help you get a better understanding of the franchisor and if you really want to work for them.
I saw your posting and thought you’d be interested in a few tips from my client who is a franchise expert at Wireless Toyz because even after someone has made the initial decision to buy into a franchise opportunity, there are seemingly endless checklists of things to consider before choosing ‘the right one.’ President of finance and franchise development of one of the country’s fastest growing companies, Richard Simtob recommends a cold hard look at every one of his top ten selection criteria before making the leap.
1. Choose a business about which you are passionate. If you love what you do, you’ll never “work” a day of your life.
2. Choose a business whose daily tasks align with things you like to do.
3. Ask yourself if the dollar potential of the business will meet your long-term financial goals.
4. Make sure the investment requirements and start up costs fit within your budget. Is financing assistance offered? What is your risk tolerance?
5. Determine if the income potential is sufficient for you and your family. Are royalty payments reasonable and designed for both the company and franchisee to profit?
6. Assuming the product is superlative and demand has been established, evaluate the franchise system itself and make sure it is based on a sound business strategy. Will you be comfortable executing that system?
7. Assess if the brand is solid, recognizable and likely to lead to sales on its own strength.
8. Research the company and its history. Has it been around long enough for most of the kinks to be worked out? Has the concept caught fire?
9. Gauge if franchisees are allowed the level of autonomy and independence you desire. Consider the level of assistance or freedom you would like for real estate, store layout and design, ongoing operational field support, business analysis, training manuals, marketing and advertising.
10. Verify an exit plan and separation strategies that are acceptable to you. Knowing how to get into the deal is only half of the equation.