Part of the investigation process is talking with a franchise owners to know further information about the business. You should prepare a list of questions to ask franchisees during your call. Doing this will help you determine the right franchise to buy.
So what will help you prepare for the list of franchise questions?
- Take note of the details needed for your franchise investigation to help you formulate the questions to ask franchisees.
- Research questions based on the industry type.
- Avoid questions answerable by yes or no. You better use in-depth questions so the franchisor will explain more.
Below is a sample outline of how you can construct an effective probing.
The Franchisee’s Work Experience
- What is your job before owning a franchise?
- What motivated you to start a business of your own?
- How long is your business now?
- What makes you choose this business type?
Initial Training and Support System
- Is the company able to provide you with the same level of support as before? What makes you say so?
- Is there a new set of training? How often do you get those? What are those pieces of training like?
- Do you feel that you lack training or was it too much? Is the company responsive in case you need additional training?
- Are there arrangements for annual gatherings or virtual meetings together with all of the franchisees? If yes, how do you benefit from it?
Ongoing Support from the Franchisor
- Is the company able to provide you with the same level of support as before? What makes you say so?
- Is there a new set of training? How often do you get those? What are those pieces of training like?
- Do you feel that you lack training or was it too much? Is the company responsive in case you need additional training?
- Are there arrangements for annual gatherings or virtual meetings together with all of the franchisees? If yes, how do you benefit from it?
Marketing Strategies
- What kind of assistance have you received from the franchisor in terms of your marketing application? How are the results?
- What lead generation schemes do the franchisor offer you? Do you find them useful?
- How are the results compared to their costs? Do you find those worth it?
- What additional local marketing strategies have you taken place?
- Can you elaborate on those strong competitors you have within your territory? How do you manage the competition?
Purchasing Power
- Are you obliged to buy only from the franchisor or are you allowed to purchase outside?
- What are the advantages and disadvantages of buying your needed products through the company? How about locally? (if you’re allowed to)
- Does the company take advantage of the collective buying power for the benefit of the franchisees? If yes, how beneficial do these purchasing power to you personally?
Franchisor/ Franchisee Relationship
- Can you feel the support and care from the franchise company? Why do you say so?
- Do you feel the competitiveness from the headquarters? Do they consider your opinions? Why do you say so?
Total Investment and Franchisee Duties
- How do you find your franchise location?
- How much you’ve spent to operate the business? Is that together with your working capital?
- How much is your total working capital? How long was that intended for?
- How much time do you spend per week now on your business compared to your first 12 months?
- Is your dream role reflected in the business that you have now? If not, how do you expect it should be?
Total Profits
- How much do you expect for yearly revenue? Does it happen?
- How long were you in the franchise business before you reached these breakevens?
- In total, how much is your annual net profit?
- Compare to the past years, do you find your net profit increasing, or does it fluctuate?
- What are the results of gaining these net profits?
- Are there changes you plan to do this year for the business? Why will you do that?
- What do you think are the differences between the top franchise performers and the low performers?
Conclusion
Using these questions to ask franchisees requires your full attention to the answers. You should make sure you get them correctly. And also observe how they feel about the franchisor and the company itself.
The importance of gathering answers from them will give you a clearer picture of the franchise company and its owner.
Not all questions here may apply to some franchisees. Most importantly, this outline can help you create an effective set of questions. Do your best to collect more information as possible.
From there, analyze the facts and decide if you can do the role of becoming a franchise owner.
It’s not easy to do the investigation process all by yourself. This is true especially if you are new in the industry.
No worries because a franchise consultant can better assist you. Just find an expert and well-experienced one. A consultant can also help you make good validation questions.
Bonus Read: “Franchise System Failure: 3 Tips To Avoid”
