When entering into the world of franchising there will always be a long list of questions you have for your potential new franchisor. It can be quite an intimidating process from an outsider’s perspective, but don’t be afraid to get into the real nitty gritty with them. Any longstanding franchisor will have heard every question you can possibly think of relating to their business and you should feel comfortable raising any concerns or issues you may have.
To get you started on the process Revive! have put together a list of nine questions you’ll want to ask any franchisor before you start your new business. Any professional franchisor should not only have these answers ready for you, but expect you to ask them.
- What exactly does being a franchisee with your brand entail? For instance, could you take me through a typical day as a franchisee?
This question will not only give you an understanding of how the business operates but will also give you an explanation of the company’s core values and how they represent them to potential customers and new franchisees.
- What does your initial training look like?
Understanding the initial training process is key to making a great start to your new career. It can also give you an idea of the support systems the franchisor will have on offer, both from the start of your agreement and in an ongoing training capacity.
- Once I’ve done my training, how much support will I receive in the first few months?
Always a good follow-up to the previous question asking this will let you know how the franchisor expects your business to progress and at what rate. Franchisors may also discuss with you their IT systems, Marketing support, financial services and other core support departments they provide.
- What kind of software do you offer to help me run my business? For instance, CRM software? Accounting/invoicing packages?
Understanding what is and isn’t provided by the franchisor from a software perspective will give you an insight on their internal support systems and allow you to budget for any external service providers that aren’t included in the package. This could be as simple as calendar/admin software to a full IT security package.
- How much is the MSF (Management Service Fee) that I must pay you each month? When does that start?
Understanding the fees you will be paying both on the initial start-up and on a recurring basis is important to help you manage your accounts and to establish the overall costs of running your business. This will also help to avoid any surprises that may occur when an unexpected bill or fee arrives. It’s important to understand what you as the franchisee are responsible for and what services the franchisor will be providing.
- What other fees should I consider each month on top of the MSF?
This could relate to fees from the franchisor, or overall business costs that you hadn’t otherwise considered, such as vehicle servicing and MOTs, Staff training, building maintenance and improvements. Making sure you are on top of your finances is key to surviving as a new business and unexpected expenses have often been the end for many small companies in their first year of operating.
- Can you provide any figures to show how existing franchisees are performing?
While it may not be the best to compare a start-up business to a fully established franchisee understanding the levels of success other franchisees are achieving will help you to gauge your own achievements. This will also help you to get a perspective on what the franchisor sees as a successful franchise and give you an idea about what you may be able to achieve.
- How many new franchisees have you taken on in the last 24 months? How many have you lost and why did they leave/fail?
Realising the importance of supply and demand for a new business opportunity will quickly help you understand your competition and how unique you will be in the marketplace. If a franchisor has taken on multiple new franchisees that year, you could be looking at a company that is rapidly in demand with territories filling up fast. However, if they are seeing franchisees failing or leaving the business then you might be looking at a business that has significant problems internally, or there is just no demand for the products or services they provide.
- Can I speak to some of your franchisees, will you put me in touch with them?
Talking to fellow franchisees about their experiences with a franchisor will give first-hand insight into the experience of starting a new business. They will be able to make you aware of any issues to be aware of, problems that may occur and even what suppliers you can use.
For more information about franchise opportunities in your area please get in touch with our team here: revivefranchise.com/contact-us/
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