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Old 12th January 2011, 09:55 PM   #1
AngelBiz
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Default What Questions You should Ask Franchise Before Joining

The franchising model provides a springboard to many would-be entrepreneurs who dream of owning their business; but do not have experience or time needed to take care of myriad aspects of running a small business.

While franchising does provide the needed support and tools for running the business; many people wrongly believe that because they are going in the franchising business they can operate the business without much effort on their part. Nothing could be further from truth. It is imperative that you do your homework before signing the franchise agreement and hand over the check for franchise transfer fee.

We recommend meeting with the representatives, preferably senior leaders, from the franchise at least twice. You should also talk to current and past franchisees to get perspective from the other side. By law, the franchise is required to provide you with the names of franchisees you can contact.

You goals when meeting with the franchise and the franchisee should be to have answer to these questions:

Read more - http://www.angelbusinessadvisors.com...efore-joining/

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Old 2nd May 2012, 05:49 PM   #2
honitel
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"many people wrongly believe that because they are going in the franchising business they can operate the business without much effort on their part."
As a franchisee you don't own a business. What you own are limited right to use another person's business. There is a huge difference. I think sharecropping is a more appropriate description than business ownership.

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Old 3rd May 2012, 04:05 PM   #3
denise1000
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Default What Questions You should Ask Franchise Before Joining

What marketing and advertising activities are performed by the franchise?
How does ad fund / marketing contribution made by the franchisees work? How much influence do franchisees have in terms of how this money is spent?
What are your top selling products? Which new product have you introduced recently?
How often do you introduce new products?
How often do you perform quality inspections? What are the rules for violations and remediation?
What are the requirements for purchasing ingredients and other support material?
How much does it cost to open a new location? Could you provide cost breakdown?
What are the various one-time and recurring fees paid by the franchisees?
How long does it take for franchise approval?
What support do you provide to the franchisees during transfer? Ongoing?

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Old 5th May 2012, 02:00 PM   #4
AngelBiz
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Quote:
Originally Posted by honitel View Post
"many people wrongly believe that because they are going in the franchising business they can operate the business without much effort on their part."
As a franchisee you don't own a business. What you own are limited right to use another person's business. There is a huge difference. I think sharecropping is a more appropriate description than business ownership.
honitel - Agreed. That's why it is all the more important to ask these questions before committing your hard-earned money.

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Old 5th May 2012, 02:16 PM   #5
AngelBiz
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Quote:
Originally Posted by denise1000 View Post
What marketing and advertising activities are performed by the franchise?
How does ad fund / marketing contribution made by the franchisees work? How much influence do franchisees have in terms of how this money is spent?
What are your top selling products? Which new product have you introduced recently?
How often do you introduce new products?
How often do you perform quality inspections? What are the rules for violations and remediation?
What are the requirements for purchasing ingredients and other support material?
How much does it cost to open a new location? Could you provide cost breakdown?
What are the various one-time and recurring fees paid by the franchisees?
How long does it take for franchise approval?
What support do you provide to the franchisees during transfer? Ongoing?
Denise - Nice additions. Thanks.

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Old 6th May 2012, 02:43 PM   #6
cfoservices
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What I am finding is that people who are contemplating a franchise opportunity need to get a second opinion as to the amount of capital required. One of the causes of failure in a franchise is running out of working capital and although the franchisor and other franchisees provide their estimates of the capital required it really does not provide enough "what if" scenarios for different levels of projected sales volume. Furthermore no matter how much of a cookie cutter approach Franchising is, everyone always brings a different set of circumstances to the table and therefore the "what if" scenarios look entirely different. I have done these "what if" scenarios for a client and it really opened his eyes.

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Old 6th May 2012, 03:32 PM   #7
AngelBiz
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Originally Posted by cfoservices View Post
What I am finding is that people who are contemplating a franchise opportunity need to get a second opinion as to the amount of capital required. One of the causes of failure in a franchise is running out of working capital and although the franchisor and other franchisees provide their estimates of the capital required it really does not provide enough "what if" scenarios for different levels of projected sales volume. Furthermore no matter how much of a cookie cutter approach Franchising is, everyone always brings a different set of circumstances to the table and therefore the "what if" scenarios look entirely different. I have done these "what if" scenarios for a client and it really opened his eyes.
Michael - that's an excellent point. My advice to anyone starting a business or franchise is this - it will always cost more than you estimate and take longer than you plan.

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Old 7th May 2012, 01:10 AM   #8
honitel
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Quote:
Originally Posted by AngelBiz View Post
honitel - Agreed. That's why it is all the more important to ask these questions before committing your hard-earned money.
Angel - thank you for the shout out gel

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Old 22nd May 2012, 07:18 PM   #9
snmo4him
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Quote:
Originally Posted by denise1000 View Post
What marketing and advertising activities are performed by the franchise?
How does ad fund / marketing contribution made by the franchisees work? How much influence do franchisees have in terms of how this money is spent?
What are your top selling products? Which new product have you introduced recently?
How often do you introduce new products?
How often do you perform quality inspections? What are the rules for violations and remediation?
What are the requirements for purchasing ingredients and other support material?
How much does it cost to open a new location? Could you provide cost breakdown?
What are the various one-time and recurring fees paid by the franchisees?
How long does it take for franchise approval?
What support do you provide to the franchisees during transfer? Ongoing?
Denise speak up a lot. After all, when franchise fee are all done selling their product is what a franchisee aiming for. And the products which they sell until to the newest product they offer must a franchise should and always be inform atleast has a knowledge about it. Serving and selling the products same as how the main company sell and present it to customers, a franchise should well observed it.

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