12 Questions to Ask a Franchisor Before You Invest

Investing in a franchise opens the door to several exciting opportunities, but like with any new venture, a full understanding of what you can expect is invaluable.

Asking a prospective franchisor the right questions will give you much-needed insight into their business model, expectations, and the risks and rewards involved, ultimately helping you decide whether it’s the right fit.

Here are some key questions to pose to ensure you’re armed with all the essential information.

1. What Do You Look For in a Franchisee?

This immediately gets the two parties on the same page. If a franchisor has expectations you cannot meet, then you’ll know immediately if it’s not the best fit. Equally, if the answer to your questions reflects your own beliefs and ambitions, you know you’re on the right track.

2. What Challenges Do Your Franchisees Face?

Running a business is rewarding but also comes with a range of risks. Asking about the common issues other franchisees have to overcome highlights areas you may struggle with and gives you a brief look into what your future may hold.

3. How Do You Support Franchisees Facing Challenges?

The natural follow-up question to the above considers the level of support provided by the franchisor. Here, you can gauge how a franchisor will help steer you to success and the kind of resources they have to assist you, especially when your franchise is facing challenges.

4. What Resources Are Provided For Franchisees?

Again, asking this gives you an overall view of what you can expect from the franchise business. Does the franchisor give franchisees help with funding, securing store locations, marketing, etc? Do they offer ongoing support?

The advantages of franchising

5. What Training Will Be Provided?

Similarly, ask more specific questions about potential training. Who will train you, and which areas will be covered? Will the franchisor help train staff, or is that the franchisee's responsibility?

6. What is the Total Investment Required?

Depending on how far along on your franchising journey, you’ll likely already have at least some idea of the costs involved. But take this chance to ask more about the cost breakdown and what each of the fees are for. Also, ask about any potential future costs and royalties that might not be included in the initial investment.

The cost of a UK franchise

7. What are the Expected Financial Projections?

Questions about expected performance for new branches will help you better understand the timeline you’ll need to work at. You can then build more solid goals and personal expectations – considering this earlier can help you stay motivated in your endeavours.

8. How Do You Maintain Good Relationships With Franchisees?

Ultimately, a franchise is a partnership, so the ties between each party must remain strong. Question how your franchisor will communicate with you – who will your main contact be, and who can you turn to when an issue arises? You may also take this opportunity to ask to speak with other existing franchise owners to get a different perspective on how the franchisor deals with their franchisees.

9. How Do You Keep Ahead of the Competition?

This will help you understand what makes the brand unique. Knowing what sets them apart and whether they’re in a good position to lead the market will help you determine if it’s worth buying into their brand identity and ethos.

10. What Are the Terms of the Franchise Agreement?

Before committing to anything, you will need to fully understand the length of the agreement, your key responsibilities and the renewal options. You should also ask about what happens if the agreement is terminated. This is your chance to get a good overview of how a franchise works.

Someone reading a document

11. Are There Any Planned Changes For the Business?

Even if you're still not sure about certain aspects of the franchise, there might be big changes coming. Be sure to ask about future plans, as they might change your view of the overall business and make it an even more attractive prospect. Asking about upcoming plans also gives you an indication of how adaptable the company is and how seriously they think about long-term strategy.

12. How Can I Scale My Business?

You might start small, but it’s worth asking about the potential opportunities for expansion and growth. It may be pertinent to ask how multi-store agreements differ from single-store agreements. Will your franchisor allow you to develop a territory, and what requirements might you have to fulfil to do so?

What Kinds of Questions Should You Ask When Buying a Franchise?

Of course, there are plenty more questions you may have that we haven't covered here. Exactly what is most useful to find out will also depend on the franchise and industry you’re investing in. However, generally, you will want to ask questions that cover topics including:

  • The business’ values, ethos and aims
  • The business’ successes and failures
  • The franchise business model
  • The financials, costs and fees
  • The available support network and resources
  • The day-to-day responsibilities and expectations for franchisees

What are the responsibilities of a franchisee

If you’re considering investing in a coffee franchise and are ready to start asking some questions of your own, please fill in our application form. We are currently looking to develop a range of new locations, so would love to hear from you.