4 Types of Questions to Ask Franchisees, Before You Become One

You’ve gone through the process of narrowing down the franchise concepts that fit you best. Now it’s time to start the research process.

Before you invest any money, it’s important to carefully and thoroughly perform your due diligence. Make calling and visiting with franchisees part of this process. Franchisees are invaluable resources when it comes to truly understanding how you will fit within a particular franchise.

In other words, you’ll want to speak with at least eight to 10 franchisees in the franchise you are considering. Ask the franchisor which owners have similar backgrounds to you, who the most successful owners are and those who may be struggling. You’ll also want to include a couple franchisees on your call list who are no longer with the franchise and gain more insight into why they left.

By conducting this type of research, you are able to gain a greater perspective of the business you are considering buying. Plus, you’ll have a better idea as to where you might fall on the performance spectrum within that franchise model – top, middle or low performing.

So how should you prepare for these calls? Gather your questions! Here are four types of questions to consider including on your list to get the most out of your conversations:

Getting to Know the Individual
When meeting with a franchisee, the first type of questions you’ll want to ask should be centered on getting to know the individual. Their answers will help you get a better feel for how similar or different from that person you are. And this information may help you predict how you might perform in this same system. Ask questions like:

• How long have you been in business? 
• What were you doing previously? 
• What made you choose this franchise?

Try to get an idea of how it’s going for them, and in general, if they like what they do.

The Rating Questions 
The rating questions are a great way to get a better sense of franchisor provided programs and support. For example, if a franchisee says that the support is great but then rates it a five out of 10, then you know you may want to dig a little deeper into the type and consistency of support provided. 

Use the rating-based questions to gather more information on the franchisor-franchisee relationship. And when a rating is exceptionally low or high, take that as an opportunity to ask them to elaborate. Sample questions might include:

• How would you rate the initial training?
• How would you rate the ongoing support?
• How would you rate the marketing programs?
• What do you like best and least about the business? 

Get a Sense of the Numbers
This is your opportunity to get real-life numbers on the annual revenue, expenditures, and revenue breakdowns. Remember how your list of franchisees to contact represented a good cross section of top, middle and low performers in the system? Well, this will give you a good idea of what you could expect in the best and worst of cases should you decide to move forward. Questions you might include on your list are as follows:

• How do you compensate employees (benefits, paid time off, etc.)?
• What is your annual revenue expectation for the year?
• Approximately how much per year do you spend on …?
• How much could I reasonably expect to gross/net in the first year, second year and third year?
• What are your costs of goods sold as a percent of sales? 

If You Could Only Ask One Question 
The answer to this question speaks volumes, “If you had to do it over again, would you?”

Just because a franchisee is considered a “rockstar” in a particular franchise system does not mean that that individual’s answer to this question would be an automatic “yes.” It’s important to remember that a franchise is a small business. It may come with a turnkey business model, but you still have to be prepared to put in the hours and the work. What is the cost/reward ratio, and is that something you would be comfortable with.

Once you’ve completed your calls and visits, and you’ve reviewed your notes, it’s time for a little reflection. Try to determine if you are more similar to the successful owners or if you relate more to those who are struggling. Ultimately, you want to be able to determine if this is something that you could see yourself doing and that you would enjoy doing. The business that is meant for you is one that will help you achieve your goals and vision.

Do you feel that you’re ready to get started? Let FranNet connect you with the business you’ve been looking for. Ask us about a free consultation with a qualified and experienced franchise consultant. Our purpose is to connect the dots and make the transition from corporate employment to the freedom of business ownership manageable and safe.