How to research a franchisee

by | Nov 9, 2011 | Business

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Sell cosmetic products or own a restaurant, groom pets, help people with their taxes or lose weight.  These are just few of the many opportunities available in today’s world of franchises that includes a stunning variety of concepts and methods selling several imaginable services and products. But from the numerous franchise opportunities, how do you know which is the best one for you and truly represents the best business opportunity?

Most people get dazzled by the slick presentations and glossy brochures that are provided by franchisors. However, it is important to get beyond these fancy items of information, to the hard facts about what the franchisors are offering.

One you have identified a brand that you are curious about, you could request the FDD or Franchise Disclosure Document that as per the law, has to be provided by each franchisor to prospects. If you are unable to understand the legal jargon in it, you could have a franchise consultant or attorney explain the terms and conditions.

Once you have understood the FDD, your next step is to start talking to the franchisors. The three main questions recommended by franchising experts are:

What is your number one focus?

The ideal answer here should be, ‘the success of our franchisees’. However, if the franchisor answers, ‘The number one focus of ours is the bottom line’, then maybe you should reconsider your choice.


Why do franchisees fall into trouble?

This question should help you in identifying the exact reasons why franchisees ran into troubled water. Again, if the usual answer given by the franchisor is ‘They did not follow our system’, continue inquiring in what way. This will help you in learning and understanding the pressure point of the system and cope with the difficult steps to be successful in such a system.

How are conflicts between franchisor and franchisee resolved?

If you get an answer saying that there has never been any conflict, then maybe you need to be more skeptical. Franchising experts suggest if there are more than three franchisees, there has to be a conflict. Asking the franchisor for details of a recent conflict incident with a franchisee and how it was resolved will help you learn and give you an idea on the amount of respect the franchisor has for the franchisee. Additionally, it will also highlight the commitment of the franchisor in making the franchisee successful.

In addition, prospects should also ask franchisors about the most important skills required for running the franchisee successfully.

Research A Franchisee

Research A Franchisee

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