Three Tough Questions You Need to Ask When Making a Smart Franchise Purchase

Franchising can be a powerful entrepreneurial model, but it’s not foolproof. While the excitement of buying a franchise may tempt you to jump in, it's crucial to maintain emotional distance and evaluate your options carefully. Here are three tough questions to ask when considering a franchise purchase to ensure it's the right decision for you.

1. How Does the Franchisor React to My Tough Questions?

It's easy to get caught up in the excitement of joining a community of like-minded entrepreneurs. However, optimism can cloud your judgment, so it’s essential to ask tough questions and carefully observe the franchisor’s responses.

A good way to gauge potential issues with the franchise model is by asking about the performance of the franchise units at the bottom of the bell curve. Find out how the franchisor handles underperformers and whether system breakdowns are common. Also, assess the franchisor’s passion for improving franchisee profitability and supporting sustainable growth. Look for open communication channels and strong franchisee-franchisor relationships. Speak to as many franchisees as possible to verify what the franchisor tells you.

2. Does the Franchisor Emphasize Selling Units Over Opening Successful Units?

A common selling point for franchisors is the rapid sale of new units, but profitability is far more important than the number of units sold. A solid franchise model will prioritize the success of each new unit through training and ongoing support, ensuring new franchises have the best chance of thriving.

To assess this, ask about the franchisor’s track record with new site openings and the level of support provided. Interview recent franchisees to learn about their experience with cost estimates, surprises, and the support they received. Find out what they wish they had known before starting and if they would have made different choices.

3. What Are the Core Motives of Their Influencers?

A strong franchise system has influencers and supporters who recommend it. However, it's important to understand the motives behind these recommendations. Are these influencers being paid, and if so, how? Do they have first-hand experience with the franchise?

Even feedback from current franchisees should be approached with caution. Some may receive incentives for referrals, which could bias their opinions. Speak to a wide range of franchise owners and trust your instincts when evaluating their feedback. Don’t hesitate to ask tough, uncomfortable questions to get the full picture.

The Bottom Line

Purchasing a franchise is a significant commitment. While there are many perks, you are joining an existing system with established methods. It’s your responsibility to ensure you understand that system fully and can see yourself succeeding within it. These key questions will help you make a more informed decision and guide you on your entrepreneurial journey.

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