What Questions Should I Ask the Franchisor?
Buying a franchise takes a chunk out of our precious time and resources especially money. It is amazing that people still go out on a whim and buy an available franchise because they loved the product or enjoyed a service. There is really nothing wrong with appreciating something. However, that should not be your only leading when it comes to buying a franchise. It is not a smart way to start a business.
There are things that you need to find out for before you say “I Do” to any franchise. Do not get ahead of yourself. A promising sign could actually be a warning sign. And a green light could just be a red light. For instance, growth is crucial to the existence of any franchise. But is rapid growth actually a good thing?
Franchisees that grow rapidly have been down to also plummet rapidly a few years down the road. This scenario comes down to franchisors obsessed with making a quick buck rather than perfecting a franchise model. There are relevant questions that you need to seek answers to.
These questions are what determine if a franchise opportunity would be worth your time and the effort that you put into it.
One Size Fits All
How careful is the franchisor when it comes to choosing franchisees? Does it welcome all-comers? That is not exactly a good sign. A good franchisor should always make the effort of interviewing franchisors and find out if that person tallies with the brand. A franchise that welcomes anyone who can write a check is an accident waiting to happen. Remember that only one franchisee can make all others look bad.
An impressive management team will always ensure that the whole franchising chain succeeds. They are the link between astronomical success and epic failure. They know what to do to reach the people. They know how to map strategies and ensure that training and customer support wins them a chunk of the market share. It is up to you to ask and find out if the management team is experienced in franchising. Besides asking questions, do not be afraid to research into their backgrounds and see how they handled franchising in the past.
Inquire if there are exclusive territories available and how big they are. If the franchisor does not offer exclusive territories or if they are small, take into consideration if your franchise business can be adversely affected by having many franchisees within the same area. Can you work with other franchisees within the same location? Are you comfortable with the competition? If a company is selling franchises without regard about where they are located, avoid them like a plague.