Finding Successful Franchises – Ask the Franchisor

One of the best ways for you to identify the most successful franchises is to ask the franchisor (the company that's selling you the business) the right questions.

Every franchisor believes that heir business is the right one for you, and many can offer some wonderful business systems. However, as you go through the franchise search process, your best options will soon start to stand out for you.

As you spend your time talking to the existing franchisees, and performing other due diligence tasks it is important not to wait until the Discovery Day to ask the franchisor some important questions.

Below you'll find some example of questions to ask. Pay attention to the amount of detail your franchisor representative provides related to each item.

Successful franchises do well specifically because they have worked out all the kinks in the process and will use each question to better introduce you to their business.

1. Will you supply me with a breakdown of all costs I stand to incur when I open the business?

2. How much working capital will I need, and what help can you give me in preparing proper projections?

3. Will you assist me with financing, and what form will this assistance take?

4. In your experience, how long will it take to start from the time I sign the contract?

5. What will my training consist of, how long will it last and are all training costs included in the upfront franchise fee?

6. What help and guidance do you offer in site selection and the setting up of the business?

7. Do you assist with introduction to existing customers (in the case of a business-to-business franchise) and/or an opening promotion (in the case of a retail franchise)?

8. What is the expected break-even for the size of unit and how long should it take me to reach this level of sales?

9. What is the level of ongoing franchise fees and royalties, how are they calculated and when are they payable?

10. Am I expected to contribute to any other costs, for example, advertising and promotional expenditure that you incur? If so, how are they calculated and when are they payable?

11. Am I obligated to undertake advertising and promotions of my own, at my own expense? If so, what help do you provide?

12. After the business is up and running, what ongoing support can I expect to receive?

13. When was the core business established, and when did you begin to franchise?

14. Are you a member of the International Franchise Association (IFA))? If not, why not?

15. Will I be permitted to see the operations and procedures manual before I sign the franchise agreement?

16. Have any of your network's franchisees failed in the past and, if so, what were the reasons for these failures?

17. How thoroughly do you vet prospective franchisees?

18. In terms of my market area, will you protect my interests to the best of your ability? What is the proximity of competition and other franchisees?

19. Are you operating in areas with similar demographics as my proposed territory?

20. Does your network operate a Franchisee Representative Council or similar body? If so, may I meet with its chairperson?

21. How do you handle grievances with existing franchisees?

22. Who are the business's competitors, what are their respective strengths and weaknesses, and how do you propose I outsmart them within my territory?

23. What are some of the threats your company sees in the marketplace?

Naturally, there might be some additional questions that might be useful to you in relation to your specific territory, but this will give you a good start.

I the end, as you review successful franchises, it is very important to feel comfortable with the franchisor's staff.

Remember, these are the people to whom you will entrust your savings, who will be your main point of contact on a daily basis and who will play a large role in determining your future.

For more on finding the right franchise go to: http://franchise-opportunities-search.com

About the Author:

Andre Chernih is a franchise expert, editor and manager of the web site http://www.Franchise-Opportunities-Search.com a collaborative compilation of information articles, opinions and recommendations created to help aspiring business owners learn about franchising and find the right franchise opportunities.