Franchising Information

Questions to Ask Franchisors

Looking for questions to ask a franchisor before franchising? You've come to the right place! If your franchisor doesn't provide good answers to these questions, it's time to look for another franchise concept.

A franchise is a lot like a marriage. It's a long-term commitment between two parties and if it's done right, everyone wins.

No one in their right mind would marry someone they didn't know, so why settle for less in a franchisor?

For entrepreneurs considering a franchise business, discovery is an accepted (and necessary) part of the process. In fact, franchisors expect potential franchisees to ask a lot of questions. From their perspective, it's better for franchisees to know what they are getting into ahead of time rather than regret their decision a few months down the road.

The rule of thumb for franchisees is that if you are unsure about any aspect of the franchise, just ask. However, somewhere along the way you should get answers to some basic questions, including the following:

How long has the franchise been in business?

Unfortunately, there are a lot of fly-by-night operators in franchising. You need to be assured that your franchise has an established track record and a solid history of successful franchisors. When you ask how long the franchise has been in business, you should also ask how many franchisees currently do business in the franchise. A low number may indicate that the franchise is new or unsuccessful or both.

What are the franchise fees?

Franchise fees represent a significant cost of doing business as a franchise. The two big ones are the initial franchising fee and the ongoing fees that are paid on either a monthly or annual basis. Even so, you should also know if there any other "hidden" fees such as marketing fees, training fees, or costs associated with ordering supplies.

What does the franchise's growth trend look like?

The franchise's growth trend is important because it is an indication of future earnings and profitability for your franchise as well as the company in general. A flat or declining growth trend may be a sign that the franchise is losing its viability in the marketplace.

What kind of support can be expected from the franchisor?

Quality franchisors are concerned about the health of their franchises and are willing to do everything possible to ensure their success. It's not uncommon for franchisors to provide assistance in a number of areas ranging from initial setup and consulting to ongoing training and marketing support.

What are my rights as a franchisee?

Franchisee rights cover a lot of ground but are vital to the success of your business. Make sure you have a thorough understanding or your rights in areas such as exclusive geographic territory, decision-making, advertising, and selling your franchise.

How can I get in touch with other franchisees?

Before you sign on the dotted line, you should plan to contact a number of existing franchisees to hear what they have to say about their relationship with the franchisor and to confirm the information you have been told by the franchise rep. you may even want to spend some time hanging out with a few franchisees to get a behind the scenes glimpse into what it would be like to operate a franchise on a daily basis.

Share this article

Additional Resources for Entrepreneurs

Lists of Venture Capital and Private Equity Firms

Franchise Opportunities


Business Glossary


Conversation Board

We greatly appreciate any advice you can provide on this topic. Please contribute your insights on this topic so others can benefit.

Leave a Reply

Questions, Comments, Tips, and Advice

Email will not be posted or shared
Code Image - Please contact webmaster if you have problems seeing this image code

Problem Viewing Image? Load New Code