When doing your research on purchasing a franchise, the questions you ask current franchisees may be very informative. These professionals have done what you’re considering, so their opinions are invaluable.
Pro-tip: Focus on how the franchisees view the franchisor based on the last 2-3 years. Focusing on what happened 15 years ago may be informative, but not really helpful but focusing on how the franchisor has adapted over time, and how they have been supporting the franchisees in the recent years will provide you the most accurate barometer of potential success in the system.
Pro-tip: Some franchisors require that you speak with current franchise owners to get an in-depth perspective on the industry and what it is like to be part of that system. If the franchisor you are interested in requires you to have such conversations with its franchise owners, it is a positive sign for you as a prospective franchisee.
No matter how much research you do on a specific franchisor, it’s impossible to fully understand what you will experience without hands-on involvement. The next best thing, however, is discussing with those who have that experience.
How long have you been a franchisee?
One of the first questions to ask current franchisees is just how long they’ve been running their business. If someone has been running a licensed location for a long time, it’s a good sign that the business model is durable.
About half of all new business ventures end in failure within five years. This doesn’t mean you should avoid a franchise if the owner you talk to hasn’t been operating for that long. They may be well on their way. If you speak to multiple franchisees who have been operating for varying number of years, it’s a good indication that success is on the horizon.
How strong is your support system?
This is the most important question you can ask current franchisees. One of the main reasons people choose to invest in franchises is for the support. An independent business owner must face the world on their own, but franchise owners are expected to have the benefit of corporate support from the franchisor. You definitely want to make sure the company you’re considering is offering strong support to its franchisees.
You should inquire regarding support for training, marketing and operations. Here are sample questions for you to ask the franchisees:
- Can you say with confidence that the franchisor invest in training and certifications?
- Does the franchisor have an in-house learning platform through which you can gain ongoing training?
- Can you give me examples of recent initiatives from the franchisor to help franchisees with training?
- Do you feel that your franchisor understands the importance of marketing on behalf of its franchisors?
- Does the franchisor understand how to do social / digital marketing?
- Are you satisfied with the digital / social media marketing by the franchisor?
- Does the franchisor support print marketing, and provide access to branded apparel and promo products?
- Do you get access to all operational systems to run your business?
- Do you get technical support from your franchisor?
- Is the franchisor responsive?
When asking about support systems, you should also inquire about collegial and mentor relationships developed through the company. Consider the fact that businesses whose owners have mentorships boast a 70 percent survival rate after five years, which is significantly higher than the national average.
What type of training does the Franchisor offer?
Most franchisors don’t walk into a business as experts in the field. Some of the most common backgrounds for WIN Home Inspection franchisees, for instance, are military, construction, real estate, engineering and corporate. Since none of these career paths provide an abundance of knowledge regarding inspecting homes, a solid training program must be in place.
This is the same in every industry. Not only do franchisees need to be trained to perform their new trade, they also need to learn how to properly run the business and represent the franchisor. This isn’t something you should have to discover through trial and error – especially since avoiding this “trial by fire” technique is one of the main reasons people invest in franchises.
Pro-tip: Training has two aspects: initial training and ongoing training. It is best that you speak with recent franchisees to understand initial training, and speak with seasoned franchisees regarding ongoing training.
Is the franchisor forward looking and introduces new programs and services to help its franchisees?
The world does not stand still. Neither should your franchisor. The best franchisors are highly communicative, and forward looking, and focused on implementing new and impactful services and programs for the benefit of their franchisees.
Examples of new programs could be new certification programs, or a developing marketing videos, or innovative email campaigns.
Did you encounter any hidden fees?
The average franchisee fee in America is around $35,000. This can vary significantly, but the most important thing to know is if you can expect hidden fees. Whether this occurs within their company is one question that current franchise owners don’t hear nearly as often as they should. Expecting to pay one price and then getting hit will additional costs is not a good way to get started in business.
Are there any pitfalls I should be cognizant of?
The most common misstep – which accounts for 42 percent of new business failures – is offering products and services that no one wants. Fortunately, the prior success of a franchise business makes this an unlikely outcome.
Make sure the franchisor’s industry is not a “flavor of the day.” Invest in an industry that is evergreen and very large. Also, it is better to invest in an industry that is fragmented meaning there is no major player who could dominate your industry. For example, home inspection services is an evergreen, multibillion dollar industry, and highly fragmented, which makes it very attractive.
Is there anything else I should know?
By asking questions to current franchise owners, you’re preparing yourself better for success. The people you’re talking to are your potential future colleagues. In a way, your success will be theirs. After discussing the topics listed here, just ask if there’s anything else you should know. You might end up learning something that helps you make the best financial decision of your life.
If you’re ready to invest in a franchise that will change your life, the experts at WIN Home Inspection can help you contact current franchise owners to learn more. You can also get more information by clicking here, calling us at (800) 967-8127 or emailing email@example.com today.