Joel Libava
There are lots of questions to ask franchisees before buying a franchise. And doing so is a huge part of any serious research.
Correction. Asking questions of franchise owners is the most important part of franchise research
But what questions should you ask before buying a franchise?
And what should the answers you get from the franchisees help you reveal?
One of two things.
Either…
A. You’re looking at a franchise opportunity that you can be successful owning. Or…
b. You’re looking at a franchise that will bleed you dry.
On that uplifting note, let’s dig in.
“Research means that you don’t know, but are willing to find out.”
– Charles F. Kettering
The 15 Questions To Ask Franchisees Owners Before Buying a Franchise
I encourage you to print out these questions for franchisees, so you’ll have them in front of you when you call them.
Additionally, I’ve provided several proven franchise research tips I know you’ll find useful.
So without further adieu, here are some of the best questions to ask before buying a franchise:
1. What happened that made you decide to buy a franchise business?
2. How did you find this franchise opportunity?
3. Why did you end up choosing this franchise?
4. How long, from beginning to end, did it take for you to do your research, and sign the franchise agreement?
5. How long did it take for you to open your business?
6. What are your favorite and least favorite parts of the business?
7. Who are your biggest competitors, and what do you do better than them?
8. How long did it take for you to break-even, and is there something you could have done to reach break-even faster?
9. Have your income expectations been met, and if not, why do you think that is?
10. Is there money to be made in this business? How much?
11. How long does it generally take to get help from franchise headquarters? Is it good?
12. If you have a complaint, how do you go about making it, and how does the franchisor respond?
13. Can you tell me about marketing, and how well it works?
14. Can you tell me something I would have no way of knowing unless I was already a franchisee
Grab This BEFORE You Buy a Franchise
Not After!
15. If you had it to do over again, would you buy this franchise? Why or why not?
Updated: 7 New Questions To Ask Franchisees Before Buying a Franchise
Here are a few more questions for franchisees.
These straightforward questions have the potential to reveal a lot of useful information.
I’m talking specifically about information you’ll need to make a yes or no decision on buying the franchise you’re looking into. But you need to ask them!
#1 – How many franchisees did you talk with before you bought the franchise?
#2 – Is there a franchisee association, or are there discussions happening about forming one?
#3 – Do you feel the executives at franchise headquarters are focused on your profitability as a franchisee?
#4 – What can the franchisor do better?
#5 – Do you publish posts about your business on social media, or does the franchisor do it for you?
#6 – Are you going to purchase more locations, and if so, how soon? If not, why not?
#7 – Have you been hearing any rumors about the company getting acquired by a private equity group or by another franchisor?
I hope you those questions are helpful!
Bonus Franchise Research Tips
Here are a few research tips that will enable you to get the best information you can, in the shortest amount of time. These tips are focused on franchisee phone calls; they’re only part of the research you’ll need to do.
1. Have a printout of the questions you’re going to ask franchise owners in front of you before you start calling them. I know this one sounds obvious, but because you have a lot on your mind, you may forget to print your questions out.
2. Know who you’re going to call before you start the process. One way to do it to circle the names and phone numbers of the franchisees you find in the FDD.
3. As much as you’re tempted, don’t call franchisees who have businesses in your area first!
Instead, call franchisees from other parts of the country. That way, by the time you do talk to franchisees that reside in your area, you’ll sound like you know what you’re doing. You’ll sound more confident.
Case in point:
I promise you that the first few calls you make to existing franchisees are going to be a bit choppy. That’s because you’re new to this, and you’re asking them some pretty personal questions. But don’t worry; after 3-4 calls, you’ll have a feel for how to approach the calls.
4. If something troubling comes up during one of your franchisee calls, contact the franchise development representative (the salesperson) at franchise headquarters, and bring it up. See how he or she reacts, and listen to what’s being said. And bring up the issue you were just told about with other franchisees. See what they have to say.
5. Once you’re finished researching franchises, and you feel like you’ve chosen one that makes sense for you, you need to hire a franchise attorney. Watch this video to see why it’s a must!
Winding Things Up
So there you have it; the top 15 questions to ask franchise owners before buying a franchise.
Ask them to get the answers you need about the franchises you’re looking into.
Finally, for more more franchise research tips, and a list of dozens and dozens of additional questions to ask franchise owners, grab my research guide. You’ll learn the best techniques on how to get your most important questions answered from both franchisees and franchisors. And when to ask them.
(Wingstop image courtesy of Leahdi, CC BY-SA 3.0 , via Wikimedia Commons)
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