Questions To Ask a Franchisor Before Becoming a Franchise Partner

Becoming a franchisee is an excellent first step for those wanting to enter the business world. You buy into and run your own business, but you will have guidance from the franchisor, as well as training support and funding already in place.

If becoming a franchisee is something you’ve been considering for a while, you may wonder how to evaluate whether an opportunity is right for you. In this article, we’ll give you a list of questions you should ask a potential franchisor before you decide.

We’ve gathered these questions from years of facilitating partnerships between franchisors and franchisees. Take a look now to find out more.

What Does It Mean to Become a Franchisee?

A franchisee is a business owner licensed by a brand to operate a retail chain outlet. Franchisees must pay a fee to the franchisor to sell established products and use its trademarks and proprietary knowledge. In return, the franchisor provides guidance, support, training, and more.

Many popular fast food chains, retail outlets, and even care businesses operate on a franchise model. You’d be surprised how easy it is to run an outlet in your favourite eatery! Eden Exchange has a consistent list of many franchises currently looking for franchisees to take them on.

8 Questions to Ask a Franchisor

If you think you’ve found a franchisor that will suit you, you will need to take some time to research them. One of the things we always recommend potential franchisees do is question the franchisor. They should be able to answer all your questions and ensure you are fully informed before you buy in. Below are some of the best questions that you can ask to confirm this is the right step for you.

1. What Does a Typical Day Look Like for One of Your Franchisees?

This is a crucial question to ask. Many become franchisees and business owners because they don’t want a typical 9-5. So, if you discover that your job as a franchisee will mean sitting behind a desk all day, it's best to know that now!

2. Can You Tell Me More About Your Training?

An excellent part of being a franchisee is that you’re provided training from the franchisor. This means that new staff training can be provided and any new procedures or software are implemented the same way company-wide.

For those new to business ownership, this training can be a safety net that makes you feel more comfortable entering a new environment. So, if you find that the franchisor doesn’t offer enough training or it's not as comprehensive as you’d like, you can decide to pass on the opportunity.

3. Can I Hear From Other Franchisees?

No one will know what it’s like to be a franchisee better than another franchisee. While franchisors can give you the information you need on big-picture things, if you want to know what it is like working within the brand, you should speak to other franchisees.

You can tell a lot from other franchisees. Determining whether they’re happy with the franchisor and how they operate will be critical to your decision. If they're willing, you should also discuss things like support, training, and finances with them.

While it's pretty unlikely, it could be a red flag if a franchisor doesn’t let you speak to other franchisees. Why don’t they want you to talk to their happy franchisees?

4. How Do You Resolve Conflicts Between Franchisor and Franchisee?

While no one goes into this kind of partnership expecting conflict, there is every likelihood it may happen at some point. A franchisor may want to paint its brand as one of peace, but every business will have some internal struggles.

Knowing how both parties reach an agreement and whether the franchisor has steps to ensure a fair outcome will help you better understand where you stand as a franchisee.

5. Will I See the Value of the Fees I Pay You?

While initially, the fees you pay to a franchisor are valuable because they’re letting you access their brand, down the line, you may want to see what value they have. For instance, when you first open, you use a well-known franchise brand to gain customers and make money. Once you’ve become established in the location you operate in, you may wonder what ongoing support your franchisor gives you that makes the fees worthwhile.

6. How Are You Innovating as a Brand?

Nowadays, if you’re not willing to adapt to change, you’re unlikely to survive long as a business. Whatever industry the franchise is in, it must be ready for new technology and innovative advances. Moving with the times is critical, so ask how they plan to do it!

7. How Many of Your Franchisees Have Failed?

Again, no one loves to talk about failure, but it is critical to growing as a business. So, if the franchisor is willing to speak about franchisees who have failed and explore why they failed, this is a good sign. It shows they are self-aware and willing to change if the old ways aren’t working.

8. How Long is the Franchise Agreement?

Renewals of franchise agreements are not automatic. On the other hand, however, you don’t want to be stuck in an exceptionally long contract either. You want to determine whether renewals happen, if the franchisor is likely to change the terms when renewing the contract, and so on.

Your business future should matter when you choose to become a franchisee. Bear this in mind when questioning the franchisor and see how they respond. This way, you can gauge whether your future matters to them too.

You could also ask how many franchisees have chosen not to renew their contracts in the past few years. This is important. Franchisee retention can give you an indication of how happy they truly are.

Is Being a Franchisee Right For Me?

Being a franchisee may be right for you for a few reasons. These include the following:

• Do you want to start your own business but do so with less risk? Being a franchisee does have some risk, as all business ventures do, but you go into it with support and guidance from franchisors and, of course, other franchisees.
• Are you adaptable and willing to change if needed? Of course, any business will require resilience, but sometimes the changes as a franchisee come from above. You may not have a say in changes in the direction that the brand takes. So, adaptability is critical.
• Do you have a particular vision for your business? If you do, being a franchisee may not be suitable for you. When you start a business, you can cultivate it to perfectly reflect the company you want. As a franchisee, you are tied to the brand you work with. If you want to try your hand at business ownership and don’t mind too much about your own vision, then being a franchisee could be perfect.

Final Thoughts

Becoming a franchisee is a big step in your journey to business ownership. You get more support than you would if you were starting independently, and you’ve already got a brand and customer base to work from. However, franchising might not be the right choice for everyone.

If you’re in talks with a franchisor, ask them questions and get a feel for how they operate. Don’t just ask about facts and figures; make sure it all feels right in your gut too!

If you’re looking to become a franchisee in the future, then Eden Exchange is the perfect place to start. Our innovative platform makes becoming a franchisee easy. With hundreds of franchises listed daily, you will find a franchise that suits you and your interests in no time.

Ready to get started? Contact Eden Exchange now to find out more.

Who we are

Eden Exchange is an integrated multi-channel platform, simplifying business buying and selling. We match, refer and connect business buyers, sellers & brokers in an ecosystem that facilitates frictionless franchise, business and finance transactions. Visit www.EdenExchange.com and connect with our engaged and multidimensional transaction network today.