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Franchise Due Diligence: 3 Revealing Questions To Ask Franchisees

Franchise Due Diligence: 3 Revealing Questions To Ask Franchisees

By FranchiseKing, Guest Blogger
Published: October 21, 2014

Before you sign on the dotted line for that franchise you’ve been investigating, it’s important to make sure you have asked existing franchisees some key questions.

Most of the people I talk with focus on earnings; it’s totally natural to want to know how much you’ll make as a franchisee. But, you need to know more. You need to find out if your vision of being a franchise owner for the franchise concept you’re interested in is realistic.

Below, you’ll find 3 revealing questions to ask existing franchisees. Don’t be shy; ask these questions. You’ll be glad you did.

3 Questions To Ask Franchisees

1.  “What is your favorite part of the business?”

Don’t you want to know what gets the current franchisees out of bed in the morning?

Don’t you want to know what will possibly get you out of bed each morning as the owner of a franchise business?

The answers you get from the franchisees that you’ll be calling may or may not be what you expected. Remember, it’s about what your vision is of the business versus the reality.

For example, what if one of the franchisees that you talk with tells you that his or her favorite part of the business is all of the community involvement opportunities their franchise business affords?

Or, maybe you learn from one or two franchisees that they like the fact that they get to come and go as they please during their normal business hours – and that’s their favorite part of the business.

The answers you get when asking this question will probably be as different as the franchisees themselves.

So, call 10-15 current franchisees and ask them about their favorite parts of their businesses.

Maybe one of their favorites will become yours, too.

 2.  “What is your least favorite part of owning this franchise?”

Don’t be like most people here. Have the courage to ask questions that may not yield very pleasant answers. Would you rather find out some of the negatives of everyday life as a franchisee before you buy the franchise…or after?

Most franchisees dislike some of the parts of their day-to-day business activities. It doesn’t mean that they are unhappy franchisees. It means they’re human.

Think about it: How realistic is it for a business owner to like everything about their business?

This is your chance*. It’s your only chance to find out the good, the bad, and the ugly about the franchise business opportunity that you may about to invest your money in. Don’t miss it. 

3.  “What do you wish you would have known before you invested in the franchise you now own?”

This may turn out to be one of most powerful questions you’ll ever ask current franchisees.

For example, what if they tell you (after you ask this crucial question) that you really don’t need to purchase certain very expensive supplies before you open for business that are suggested by the franchisor, until you’re in your sixth month of being in business? Wouldn’t having that kind of information help you get to break-even faster? Investing less money up front (if you can) is a good thing!

Here’s another one: What if one or two of the franchisees tell you that you don’t necessarily need a 2,000 square-foot space for your franchise business like the franchisor suggests and to look for commercial space in the 1,300-1,400 square-foot range instead? That kind of information could end up saving you $500 or more a month in rent! Again, information like that could help you make money faster.

Can you see how asking questions like that could help you make a fact-based decision on the franchise business you’re about to purchase?

Gather as much information as you can before buying the franchise business you’re interested in.

It pays to ask great questions as you do your due diligence.

You don’t know what you don’t know.

Until you do.

*Non U.S. Government links

About the Author:

FranchiseKing
Joel Libava

Guest Blogger

The Franchise King®, Joel Libava, is the author of Become a Franchise Owner! and recently launched Franchise Business University.