When buying a franchise, one of the best ways to research the opportunity is to question existing franchisees. But many people tell me they don’t know what to ask, or they know what they want to ask, but they don’t know how. This article solves those problems. Here are the four most important questions to ask before you buy a franchise:
Q1 “Knowing what you now know as an experienced franchisee, would you buy this same franchise again?”
Some experts will tell you never to ask Yes/No questions, but in this case you must because you want a definitive answer. If you ask ten franchisees of the same brand that same question you want to add up the “yeses” and “nos” at the end of your interrogation and decide if this is a franchise you should buy. If the majority of the franchisees you interviewed say “No” to your question, then you probably need to look for another opportunity. There could be exceptions, but you’ll want to understand what they are before you buy the franchise.
Q2 “Do you find the business as satisfying today as you did when you first bought the franchise?”
It’s another purposeful Yes/No question. You don’t want an explanation, you want an answer. And you can always follow up with other questions: “What happened to change your degree of satisfaction?” . . . “What could you or the franchisor do to make the franchise more satisfying now?”
Q3 “What’s the secret to the success of the top franchisees?”
This open-ended question can reveal important facts that will lead to additional questions. For example, if the franchisee answers, “Location!” you need to zero in on where to open your franchise. If the answer is “sales skills” or “management skills” or “accounting skills” you need to evaluate your own skills, or your ability to hire those skills.
Of course, if you’re not questioning a top franchisee, you may get the wrong answer! That’s why you should always ask the franchisor to give you a list of the top performing franchisees, i.e. the franchisees who won awards at the last three annual conventions. (A franchisor that won’t do that may not be worthy of your consideration).
Q4 “If I invest my money and listen to the franchisor, and I work the business as well as you have, how much money can I expect to earn my first year as a franchisee? The third year? The fifth year?”
That’s what you really want to know, isn’t it? How much money will you make? The franchisor probably won’t tell you, but the franchisees will if you ask in the gentle manner I just described. If you’re expecting to buy a franchise and earn six figures annually, but no franchisee has ever performed that well with this franchise, you need to know that information upfront. It may mean you’ll have to buy more than one unit to meet your financial goals.
While these are some of the questions you should ask existing franchisees, you’ll find more in my book: 101 Questions to Ask Before You Invest in a Franchise.
Tags: franchise questions
This post was written by Dr. John Hayes