You're at the point in your franchise journey where you've narrowed down the companies you can really, truly visualize yourself running. You've probably already submitted a franchise application or are getting ready to.
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But before you leap into franchise ownership and invest a significant amount of money and time, it's important to get some questions answered.
One of the best ways to get a detailed look at the franchise you're interested in is by conducting a comprehensive interview. After all, you want to make sure you're investing in a business that aligns with your goals, values, and expectations. Not to mention, the franchisor is likely to put you through a similar set of questioning — so why not do the same?
Asking a franchisor a set of targeted questions can help identify potential red flags or concerns. Or it simply might glean that the franchise — no matter how great — is just not right for you.
For instance, you might be looking for a franchise that allows you to have creative control. However, through a series of questioning, you learn that the franchisor provides strict guidelines and procedures that must be followed in terms of creative execution. Even though you could be successful with this specific company, you decide to pursue a different opportunity instead — helping to avoid potential problems in the long run.
Related: Which Franchise is Right For You? Follow These Steps
Not sure where to start? Keep this list handy before walking into your next franchisor interview.
These questions should provide a solid foundation of the franchisor's business model, support structure and overall vision for the franchise system. Remember to take detailed notes and ask follow-up questions as needed.
Related: Owning a Franchise Could Be Your Fastest Route to Business Ownership. Here's What You Need to Know to Succeed.
Related: We've analyzed mountains of data for thousands of franchises and found the best opportunities for you in in our 44th Annual Franchise 500 Ranking.
Asking questions can help you make an informed and calculated decision about whether a particular franchise opportunity is right for you or not. You want to make sure you're investing in a business that has the potential to be successful and profitable and fits your personality.
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After the interview, ask follow-ups, review your notes, talk to other franchisees and, finally, decide whether or not to move forward with the process.
This type of ownership will give you an arm's-length control. It allows you to treat it as an investment and not a lifestyle change. While you own the business, you hire managers to deal with the daily operations. While this leads to higher labor costs, you can have more freedom and scalability.
This is the best of both the owner/operator and absentee ownership models. With this ownership type, you have help with the daily operations while also having the time to have a day job and support the business financially. Many former athletes and other professionals choose this form of ownership after they can operate the business while pursuing other opportunities or spending more time with family.
You also need to consider how many units you’d like to buy. You can choose:
This is the classic franchise model and is great for novices trying to make it in the business world. With single-unit ownership, you can focus on one location. Single-unit ownership is especially beneficial if you are new to franchising. With one franchise store, you can focus on running it as well as you can and getting a better sense of how the franchise business operates. Since you only have one location, your franchise cost will be lower, as well. The franchise cost goes up as you own more locations.
You may decide to own multiple units of a franchise in a specific area. Usually, a franchisor will give you a discounted rate per unit. With this type of ownership, it is common for the franchise owner to be the owner/operator of their main unit while taking a semi-absentee ownership role of the secondary units. But as a franchise owner with multiple units, you have more to focus on and shouldn’t take multi-unit ownership lightly.
Area developers are similar to multi-unit owners but on a larger scale with more units encompassing a territory. The area developer is granted the right to open a certain amount of units by the franchisor.
A misconception about franchising is that fast-food restaurants are the only kind of franchise to choose from, but this is not true. The great thing about franchising is that there are franchise opportunities in any industry that you can think of:
Deciding to invest in a franchise really is exciting and life-changing. Before investing in a franchise business, it would be beneficial to speak with a Franchise Consultant. This professional knows how to buy a franchise and connects franchisors and aspiring entrepreneurs. The Franchise Consultant will consider your background, skills, and financial situation to determine if franchising is right for you. Based on their knowledge of how you own a franchise, the Franchise Consultant connects you to franchisors who align with your values and have an environment where you can succeed as a franchise owner.
In addition to speaking with a Franchise Consultant, other important parts of the due diligence process include discovery day and franchisee validation. Entrepreneurs who want to open a franchise are invited to a franchisor's discovery day if they have what it takes to buy a business. During this event, which usually takes place at the franchise business’ corporate headquarters, you can question the franchisor and other leadership team members. Ask a few specific questions in order to get the most out of the experience.
Franchisee validation is also a good way to finalize your decision to own a franchise. As a prospective franchise owner, you can ask questions to existing franchisees in the system. The questions that you ask them should be thought-provoking and asked several times to get a good sense of how a franchise business really works. If you still believe that owning a franchise will beat you and the franchisor after this process, then go all-in and follow the system.
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