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Questions to ask a Franchisor when considering a Franchise Business

September 2nd, 2011 by Joel Caws in Franchise Sales and Development in the UK

Joel Caws - Technical Director, Select Your Franchise

One thing is for sure: if you are looking for a franchise you won’t be spoilt for choice! There are around 900 franchise systems operating in the UK and several hundred of those franchise systems are looking for new franchisees at any given time.  So with all those options to choose from it might seem a bit of a challenge to find the one that suits you best.

The initial stages of searching out your franchise match can be fairly straightforward. You can use online franchise directories, franchise magazines and exhibitions to effective research and whittle down your selection to those that are within your budget, have availability in your preferred trading location and that appeal to you as someone who will be running the business. Beyond that you are faced with the task of talking to those franchisors you believe represent the most suitable options for you and finding out which one suits you best. Given that you may have no experience in franchising or how a franchise operates, how do you know what questions to ask the franchisor? Well, here’s a few good options to begin:-

How did your pilot businesses perform?

A franchisor will usually have setup some initial pilot businesses to test their franchise business model. In this way they have ‘proved’ their franchise model works and can turn a profit. Finding out how well they did, and their turnover/profit figures, should give you an indication of its potential if you were to run the franchise business.

May I have a list of some of your franchisees as references?

Existing franchisees are an important reference of how well the franchise business performs ‘on the ground’. Take the opportunity to call up, or visit, a few of the franchisees and ask them how well the franchise business works for how well supported they feel by the franchisor.

What is the total investment I will need?

The franchise fee that you will see on any documentation may not be the total cost to start up the franchise. There may also be premises costs, initial stock, vehicles, staffing costs. These will obviously be dependant on the type of franchise but almost every business requires some initial finance even if it is to fund your own wages for the first month or so while you build up your initial revenue. If you do not see any mention of start up costs in the franchisors information pack make sure you ask.

What training and support will I receive?

An important part of running a franchise business is that you operate it in-line with the proven franchise system. This makes training and support important to ensure a) you are trained initially in the correct way to run the business, and b) that you are able to pick up the phone and call the franchisor if you experience any problems that you could use some advice on resolving in the course of running the franchise business.

How do I feel about working with these people?

This is not a question for the franchisor so much as a question you should ask yourself during the research process. You should have opportunities to meet and chat to the franchisor so: How do you feel about them? Do you feel enthusiasm from them about you coming on board as part of their network? Do you feel that they would be supportive to you in your new business venture?

Ultimately, the success of any business venture will come down to your own determination and commitment to make it work. You can, however, benefit from the experience of a franchisor and the proven business model of a franchise.


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