Becoming a franchisee is a life changing decision. For most, the purchase of a franchise means transitioning out of a career, operating your own business for the first time, and investing ones hard earned savings. The good news, in virtually all scenarios, people prior to you have already made the same life changing decision.
In my opinion, the most important due-diligence step a prospective franchise owner can take is to speak with a current (and if possible a former) franchisee of the brand.
These 8 questions will help maximize your conversation with franchise owners:
1. What was your background before you became a franchise owner?
Importance of this question: Do I have the experience & skill set necessary to be successful?
2. Can you explain a typical day in your role of being a franchise owner? What is the most challenging part?
Importance of this question: Could I do this work day in & day out?
3. (If local) Would I be able to shadow the operations of the business for a day?
Importance of this question: Test drive the franchise before you own it.
4. Would you be willing to discuss your financials; including project cost, revenue, EBITDA, & how long it took to break even?
Importance of this question: Does this ROI align with my expectations and goals?
5. What happened after you signed the Franchise Agreement?
Importance of this question: Does the franchisor have streamlined on-boarding processes which sets franchisees up for success?
6. What didn’t you learn in training from the franchisor that you had to learn yourself? Did you feel prepared day one to open the business?
Importance of the question: Will I be prepared to operate this business successfully?
7. What is one thing you know now you wish you would of known before you purchased this franchise?
Importance of the question: What am I missing?
8. If you had to do it all over, would you purchase this franchise again?
Importance of the question: Overall happiness of the franchisor/franchisee relationship. Use their experience for better or for worse to your decision making benefit.
These eight questions can be used as a cheat sheet to maximize your time speaking with current franchisees of the brands you are interested in. The desired outcome of these crucial franchise discovery calls is to receive unbiased perspectives of what it is like to become a franchisee of the brand. After a few calls, trends will start to form which will substantially influence your decision making. Carefully take into consideration all findings before you make your very own life changing decision and become a franchise owner.
Here are some other great articles which helped me formulate my opinions and should be viewed as you consider franchise opportunities:
Ryan Rao is a Principal of Apex Franchise Development Group and is a franchise development expert who has grown multiple franchise based businesses into national and international brands. Franchising has allowed him to help individuals realize their dreams of business ownership, while permitting them to experience the independence, flexibility, and freedom that comes with being a business owner. He also serves as a franchise consultant, and is a personal growth advocate.
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