Questions about the Franchisor

When you are looking to buy the right franchise, you must have confidence in the franchisor you choose. Before buying a franchise, this is a list of questions you may ask on the Franchisor’s business and company or organization structure in order to help you assess the opportunity. Please, bear in mind that there are many types of franchises and you may have to tailor them to suite specific franchise models.

 

What is the background of all the directors?

Have they got franchising experience? Why did they decide to go down the franchise route?

 

Are they financially sound?

Have they ever been bankrupt?

 

What is the total cost to buy a franchise?

Will you supply me with a breakdown of all costs necessary to open the business? What are these costs?

Are there any other costs I can expect?

to be asked for after I open the franchise? Do I have to contribute to any other costs such as advertising and promotional expenditure that you incur, if so how much?

Do you charge ongoing franchise fees

and if so what are they and how are they calculated?

 

Do I have to pay a deposit or upfront payment

and if I do not proceed will I lose my deposit or any part of it?

How much working capital would I need

and what help can you give me in estimating my projections?

What is my expected break even

and how long should it take me to reach this figure?

How long will it take to start trading

from the time I sign the contract?

How thorough is the training

at the start-up stage and thereafter? What will the training consist of and how long will it last? Are all training costs included in my franchise fee?

What help, if any, will I receive

if I want to do some advertising and promotion on my own?

What ongoing support

am I provided with?

What help and guidance do you offer

in site selection?

Do you provide instructional and operational manuals

and can I see them prior to signing?

Can I be provided with a full list of all franchisees

in the network and can I contact them?

 

How thoroughly do you vet

prospective franchisees to maintain a high standard in the network? How many do you reject?

Have any franchisees failed,

and if so why?

How do you handle grievances

with existing franchisees?

Will the territory offered be for my sole and exclusive use?

 

Are you currently operating in areas with similar demographics

as my proposed territory?

 

Does your company see any threats

in the current marketplace?

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