12 Questions You Must Ask When You Interview Existing Franchisees
So you've found a franchise you're excited about, and you're considering moving forward and becoming a franchisee. Great!
But if you've only spoken to the franchisor so far, you've only gotten one perspective. Even the most honest and forthcoming franchisor can't tell you what it's really like to be a franchisee. But luckily, you can talk to someone else who can: their existing franchisees.
Before you commit to any franchise, you should take the time to call a few of their current franchisees and get some candid answers to your questions. They've been where you are now, and they'll be able to tell you what they know now that they wish they knew when purchasing the business.
Be careful not to only speak to the most successful owners, or ones who have been coached to give the franchise a positive review. What you want is the full picture of what it's like to be a franchisee, including any potential downsides, so calling franchisees at random will give you the clearest picture of what you're getting into.
Here are some questions you should be sure to ask:
- Are you happy with your franchisor? How is your experience different from what you expected?
- How long did it take for you to realize a return on investment?
- Approximately how much are you earning? Is it what you expected?
- How many hours a week do you spend working on the business?
- Did the training your franchisor provided really prepare you to run this business?
- Were there any hidden fees or unexpected costs?
- Are there restrictions on the products you sell and use in your business? If so, were you told of those restrictions beforehand?
- What do you think of the marketing and advertising? Does the franchisor advertise as much as you were promised it would?
- What kind of support do you receive now? When you have a problem, is your franchisor responsive or do you feel like you’re on your own?
- What did it cost you to build and start the franchise?
- Did your franchisor accurately estimate the start-up and operating cash you needed?
- If you had it to do all over again, would you choose the same business and franchisor?
And of course, feel free to add your own questions! Now is a great time to ask anything you've been wondering about, from someone who knows the answer first hand.
How Do You Pay for a Franchise?
Whether you’re purchasing a whopper from Burger King or joining the Burger King franchise system, the old mantra holds true: there’s no such thing as a free lunch. When you first get started running a franchise you need to pay a fee to allow you to enter into that franchise. These fees are the largest fees that you will normally pay a franchisor and typically range between $5,000 and $1,000,000 depending on the franchise. The franchisor charges this fee as a way to recoup the costs of expanding the franchise and to continue to grow. From a franchisee perspective, this is a major outlay and can take a long time to make back, but is a necessary step. Aspiring business owners must understand how much capital is available to them so they can ascertain how much they can afford. The cash you have at your disposal is known as liquidity, and there are numerous ways to increase your liquidity above the balance in your bank account. As a result, many people don’t realize how much capital they actually can use for investments, like launching a franchise branch. We’ll run through some of those methods below.
Why You Should Choose a Franchise with Diverse Revenue Streams
In this article, we’ll explore several examples of franchises in a variety of verticals who execute on this strategy well, including security franchises, pet clinics and day spas.
1-800-JUNK-USA Acquires College Hunks Hauling Junk Franchise
Looks like the College Hunks are graduating to the Penthouse.
