Purchasing a franchise, although it might seem like a lucrative business, is a huge undertaking. Like opening your own business, owning and operating a franchise takes drive, fortitude, and money. While opening a business of an existing brand alleviates some of the pressure of building your business from the ground up, there is still quite a bit of work involved.
If you’re seriously interested in opening your own franchise and have researched franchise opportunities on sites like FranchiseExpo.com, the next step is to research franchisees from the same companies you’re interested in. They can provide you with critical information you would otherwise have never known.
Here are five questions to ask them:
1. How Well Did Your First Opening Go?
While this is a broad question, the answers provided can offer you information on how the franchisor runs its company, how its systems of operations works, and how the franchisor cares for its franchisees. Honest answers can reveal how easy the franchisor or difficult the franchisor made the process of opening a franchise. While opening a business always has a few snags in the process, this question will give you a chance to understand how well the franchisor corroborates with its franchisees.
2. Do the Marketing Programs Work?
Many franchises have specific marketing programs and initiatives franchisees must follow or display in their businesses. While the marketing programs are designed to lure customers to the brand, at times, some individual franchisees feel the marketing programs yield the opposite effect, which can severely detriment their franchise’s stability.
3. How Is the Community?
Many franchisors sell their franchise opportunities under the guise that everyone is one big happy family. In most cases that’s true. However, there are some franchisees who feel as if their franchise family is not supportive, lacking teamwork, organization, and community. Additionally, it’s important to find out if the franchise’s values match your own. If they don’t, you could potentially run into trouble down the road.
4. How Much Profit Can I Make?
This serious question is important to your financial well being. If you’re going to invest money into a franchise, it’s important you can yield a steady profit. Speaking with current franchisees can provide you crucial financial information about the average startup investment, average sales, expense categories, how long it takes to break even and turn a profit, and what the gross and net margins are for the business.
Although this might be the most important question to you, consider asking this question after you’ve established credibility with the franchisee. Since many people are hesitant to share financial information, establishing a solid foundation with them can make them feel more comfortable.
5. Would You Buy This Franchise Again?
Knowing why a person would or wouldn’t buy this particular franchise (or an franchise) again can help you determine whether or not it’s worth it for you. Their information can reveal whether or not your interest in the company is growing or weakening.
Your reactions to these questions can give you a solid answer one way or the other about purchasing your own franchise.