There are three parties a prospective franchisee is going to interview. They are the franchisor, the franchisee, and former franchisees.

Questions to the Franchisor - The key is to not be afraid to ask questions.

•Find out what is included in the training program.

•Ask about assistance in the field when your franchise is up and running.

•Ask about site selection…I will be of enormous help if it does.



Questions to Current Franchisees

•In item 20 of the franchise disclosure document you will find names, telephone numbers and addresses. •How long has the franchisee operated the franchise?

•What was their background prior to becoming a franchisee?

•Where is the franchise located? Are they on a main street or a strip mall?

•Was the training the franchisor offered helpful in getting the business off the ground?

•Is the franchisor responsive to your needs?

•What is a typical day like?

•Have there been any problems that you didn’t anticipate?

•Were there any expenses that you didn’t anticipate?

•How do you feel about the quality of the product or service?

•Most franchisors have regional or annual meetings, I would ask if they attend them and what they are like.

•Are they satisfied with the franchisors advertising program?

•How much money do they spend on advertising?

•Knowing what you know, would you make the investment again.

•I would ask financial questions at the end. I would build rapport first. Kind of like a market research survey where you ask demographic questions at the end. Have your sales and profits met your expenses? Tell me about the numbers in the business? –You could phrase it as, how much money can I expect to make my first year as a franchisee, second year as a franchise and the fifth year as a franchisee? •Will there be any additional working capital required after the initial fee and investment?

What type of support will the franchisor provide one your franchise has opened its doors?

•How will the franchisor arrange for the supply of product to the business? Ask to see their current price sheet. In many cases, you should be getting a better price buying supplies from the franchisor.

•Ask the franchisor if the company has any plans for further expansion in the state. Has it identified any locations it plans to develop?

•Find out how many franchises have been sold to investors in the state you are opening the franchise in the last 12 months and how many have opened a franchised business in that time.

•Find out if any franchisees have been terminated. If some have, have the franchisor detail the reasons. Have any franchisees failed or gone bankrupt?

•What kind of financing is available from the franchisor, if any?

•Find out how disputes between the franchisor and franchisees are settled. Does it go to arbitration? Does a dispute have to be heard in a certain state?



Questions to Former Franchisees

Just as important is to interview former franchisees.

•What happened?

Why are you no longer a franchisee?