The turn of the year is typically a time where we see a significant spike in franchise enquiries. However, with so much choice out there, how do potential investors decide on what’s right for them? By not asking the tough questions up front, they’re potentially missing out on the transparency they need and uncover some unwanted surprises further down the line.
Whether you’re looking across different sectors within franchising or talking to competitors in the same industry, asking tough questions is a must to see if it’s the right investment for you.
The 2024 National Franchise Survey by the BFA found that 60% of franchisees felt their franchisor has met their expectations. I believe that figure should be significantly higher and if you get all the information and transparency you need prior to your investment, you’ll know more about what you’re getting into.
Here’s some tough questions I think should be at the top of your list.
Have any locations failed or closed within the last three years? If so, why?
This is something that’s vital to know. While franchising gives you a significantly higher success rate than going it alone, franchisors still endure closures. A high turnover or closures may indicate issues with the franchise’s product or model.
Can I meet with your franchisees?
If you’re considering becoming a franchisee, it’s incredibly valuable to speak with people already in that position. You’ll gain an insight into the day-to-day running of the business and hear their real-life experience with the brand. Try and do it independently too and consider doing a mystery shop at one of the franchise’s locations to get an authentic experience.
How do you adapt to the changing market?
You need to know that your investment is future-proof. Quiz your potential franchisor on how they’re planning to stay ahead of the market and ensure that your business has longevity. You want a franchise that’s proactive and always looking forward.
How many of your franchisees are multi-unit owners?
A strong indicator of success and positive franchisee sentiment is how many franchisees own multiple locations. If this is a high percentage, franchisees are willing to reinvest and indicates they’re enjoying a strong return on investment.
What’s your support structure and how accessible are they?
Franchising is attractive due to the fact you’re in business for yourself, not by yourself. Quiz the franchisor on the support you’ll receive and what different departments and personnel that you’ll have access to.
What’s your strategy for maintaining and increasing brand awareness?
You’ve invested in a franchise to leverage an established brand. It’s important to check for consistent marketing support and branding efforts, which benefit franchisees and aim to increase brand awareness.
By asking these tough questions, you’ll get a clearer picture of the franchise and if it’s the right opportunity for you. What’s more, you’ll gain a clearer understanding of the risks, rewards, and level of long-term commitment involved in operating a successful franchise.
