What Questions Should I Ask Franchisees When Evaluating a Franchise?

Questions about the franchisor:

• How much support do you get?  
• Are you satisfied with the franchisor?  
• Is the franchisor fair and easy to work with?  
• Does the franchisor listen to your concerns and accept input from the franchisees?  
• Have you had any disputes and, if so, were you able to settle them?  
• Do you know of any trouble the franchisor has had with other franchises, competitors, or the government?  
• Has the franchisor kept its promises?   

We recommend that potential franchisees ask these five questions to understand if a franchise opportunity will be right for them.

Questions about costs: 

• Is your franchise profitable?  
• What are your gross revenues?  
• What have your pre-tax profits been for the past three years.   
• What is your salary?   
• How is your cash flow?  
• Were the franchisor's start-up costs and working capital requirements accurate?   
• Were the franchisor's profit projections and earnings claim accurate?   
• How long did it take you to to break-even?  
• Have you made the profit you expected to make?  

Questions about training:

• Was the training by the franchisor adequate?  
• Was the training by the franchisor effective?  

Questions about products and services:

• Is the product or service you sell of good quality?  
• Is delivery of goods from the franchisor adequate?  
• Are you getting supplies cheaper from the franchisor than you could on your own?  
• What does the franchisor supply? 

 Question about operations:

• How effective are the operational procedures?  
• Have the operations manuals helped you?  
• What do you think of the manuals?  
• Are the manuals updated on a regular basis?  
• What did you do before you bought the franchise?  
• Describe your day.   
• How many hours a day do you work?  
• How many hours a week do you work?  
• How much freedom do you have to make decisions?  
• Are you happy with your investment?  
• Are you disappointed in any aspect of the business?  
• Is there anything about the business you do not like?  
• What do you like most about the business?  
• What kind of problems do you encounter?  
• What do you like least about the business?  
• Would you do it again?  
• Would you recommend I buy a franchise?  

Questions about advertising and marketing:

• How much do you spend on advertising a month?  
• How effective is the regional or national advertising?  
• Do you think you are getting a good value for your advertising dollars?  
• Are you satisfied with the marketing and promotional assistance the franchisor has provided?