General Questions
- How long have you been a franchisee?
- How many do you own?
- Are you happy with the support you have received?
- Are you making what you thought you would?
- How has advertising been?
- How has it been finding employees?
- Are your COGS what you thought they would be?
- Were the range of costs in the FDD to open & operate the first 90 days accurate?
- What kinds of information do you wish would have been shared with you but wasn’t before you signed the agreement?
- If you had to do it all over again, would you?
- What has been your main challenge with the business?
- What has been your main challenge with the franchisor?
- What made you choose this franchise?
- How many hours a week are you working on the business?
- Have you been profitable?
- Have you been able to pay yourself?
- How much competition do you experience in our local market?
- How much time did you devote to daily operations vs. growing the business with marketing, advertising & training?
- Have there been any unexpected costs?
Additional Questions for Transferred Stores/Former Franchises:
- Did you transfer at the end of your term or earlier?
- Did you find the person you transfer to or did the franchisor help you?
- If you found them, how?
- Was the transfer process easy? Did the franchisor assist you?
- Did you receive any compensation from the person you transferred it to?
- Why did you ultimately decide to leave the system?
Questions to Ask Closed Franchises:
- Did you close at the end of your term or early?
- If early, did you have issues with the franchisor for closing early?
- Why did you decide to close?
- How was the closing process?
- What did you do with the physical assets?
- Do you feel the non-compete in the agreement is fair now that you are closed?
Franchise Validation Questions:
Individual Background
- What line of work were you in before?
- Did you consider any other franchises before choosing this one? If so, what made you choose this one versus others?
Initial Period
- What would you say is the biggest mistake a first-year franchise owner can make?
- How are the other franchises in the system?
Support
- How could the franchisor improve?
Franchisor Relationship
- How is your relationship with the franchisor? Has this changed over for better or worse?
- Have you experienced any conflicts with the franchisor? If so, have they been resolved?
- Do you feel supported by the franchisor? Do you feel they care about you and your success?
The Franchised Business
- What is your current hourly commitment to your business per week?
- How would you describe your role in the business?
- Have you run into any major surprises since joining the franchise system?
Marketing
- How does the franchisor contribute to your marketing efforts?
- Have you added specific, local programs to generate business?
- Are there any competitors in your area? What do you think are the major competitive advantages that set you apart from the competition?
Purchasing Power
- Are you required to purchase from the franchisor or approved suppliers, or do you have the freedom to purchase as you choose?
- Does the franchisor use the collective buying power of the entire franchise to obtain discounts on supplies and/or inventory beyond what the individual franchisees could achieve?
- Are the services that you get worth the fees that you are paying?
- Have you encountered any surprise costs of significant expenses related to the operation of your business?
- Have you been required to pay for things you did not expect or were not prepared for?
Money
- Going in, what were your expectations for annual revenue? Have those expectations been realized?
- How long were you in business before you reached breakeven? Was it what you anticipated?
- What factors impact your annual net profit most?
- Do you have plans to do things differently in the coming year?
- Have you noticed anything specific that separates higher performers than lower performers in your franchise system?
Time Machine
- All things considered, If you had to do it over, would you decide to go into this business again? Why or why not?
Questions About the Franchisor
- Is the franchisor fair and easy to work with?
- Do you know of any trouble the franchisor has had with other franchises, competitors, or the government?
Questions About Costs
- How is your cash flow?
- Were the franchisor’s start-up costs and work capital requirements accurate?
- Were the franchisor’s profit projections and earnings claim accurate?
- How long did it take you to break-even?
- Have you made the profit you expected to make?
Training
- Was the training by the franchisor adequate?
- Was the training by the franchisor effective?
Operations
- Have the operations manuals helped you?
- Are the manuals updated on a regular basis?
- How much freedom do you have to make decisions?
- Are you disappointed in any aspect of the business?
- Is there anything about the business that you do not like?
- What do you like most about the business?
- What do you like least about the business?
Advertising and Marketing
- Are you satisfied with the marketing and promotional assistance the franchisor has provided?
Understand if Former Franchisees Were Successful
- What happened at the end of the franchise agreement?
- If you could go back in time, would you buy your franchise again?
Find Out if Franchisees Feel Supported by the Franchisor
- Does the franchisor respond quickly to your questions?
- Does the franchisor encourage or facilitate communication between franchisees?
- Are you in competition with the franchisor, the franchisor’s other brands of other franchisees?
- Have you had an issue or a dispute with the franchisor and it was resolved to your satisfaction?
- Tell me about the marketing strategy and if you are happy with it?
- Has the franchisor made any changes to the system that has impacted our business?
Learn About the Pro and Cons of the Franchise
- Have you been able to renew your agreement, or do you intend to?
Questions to Ask Former and Current Franchisees
- How long have you been a franchisee of this brand?
- Why did you become a franchisee of this brand?
- Did you have a background in business before you became a franchisee for the first time?
- What is the most important advice that you would give to anyone buying any franchise?
- Has the franchisor kept promises made to you before you signed up?
Find Out if Current Franchisees are Successful
- Is your cash flow positive or negative? What are the main factors affecting your cash flow?
- What are your costs of goods?
- Does your franchisor require you to pay more for supplies than you think is fair?
- In the next 10 years does the franchisor have plans to grow or sell the franchise system?
Understand if Other Franchisees are Making Money
- Across all franchised businesses, not including corporate stores, what is the highest, lowest and average gross revenue?
- What is the average time it takes for a franchisee to pay off their investment and start making a return? What is the shortest and the longest time across all franchised businesses?
- What capital expenditure is planned during the term of my franchise agreement?
Find Out About the Training and Support
- Does training cover the operations such as how to use a particular machine, as well as general business skills, such as how to manage cash flow?
- What happens if I need extra training or support?
- What are the key performance measures and does the franchisor help me to meet them?