What Questions Should I Ask the Existing Franchisees?
Franchising is a viable venture. But it is important for you to play your cards right. It is not enough to have a ton of information available to you, courtesy of your franchisor. It is not enough for them to provide you with great training sessions and ongoing customer support.
You need to also talk to existing franchisees. These are the people who dig into the trenches on a regular basis. They are the ones that can truly give you a real picture about the franchise that you want to run with.
A Franchise Disclosure Document often features a list of previous and current franchisees. Reach out to some of them and talk to them. Remember that some of them might be busy running their business. So it is imperative not to take too much of their time and ask the right questions.
Following could be some of the right questions:
Did They Hit the Ground Running?
This general question focuses mainly on how well the franchisor system works and the quality of training as well. A good answer will hint you about how convenient it is to open and run a franchise. There is no start-up business that is error-free. However, it is important to avoid those gaping potholes that would wreck you outright before you even have the chance to take off.
How Effective is the Marketing Program?
Many franchisees are harnessed with marketing systems or initiatives are meant to build and boost their businesses. They are crafted to solicit prospects and convert them to returning customers. Marketing is the lifeblood of any successful business. You need to know how well the marketing system works. And there is no one better that can tell you, than the person that is actually using it-the franchisee.
Talk About Money
This should be the most important question. But you should not be the first question to ask. It can easily communicate a wrong signal and make you look as if you are in it for a quick buck. So make it the last question before you call it day. You need ask franchisees how much they make on the average. How much it costs them in expenses. You need to find out their gross and net margins. In addition, you need to find out when they broke even and started making cool profit.
Some franchisees might be uncomfortable about discussing their finances, especially with someone who they just met. Ensure that you have built a rapport first and checked on them a few times before shelling out questions.