101 Questions to Ask Before You Invest in a Franchise
Essential questions to ask before investing in a franchise to understand the business model, financial requirements, and potential risks and rewards.
1What are the initial investment costs and what does the franchise fee cover?
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What are the initial investment costs and what does the franchise fee cover?
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Why this works
Helps you understand the upfront costs and what you're paying for, which is crucial for financial planning and budgeting.
2What are the ongoing fees and royalties, and how are they calculated?
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What are the ongoing fees and royalties, and how are they calculated?
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Why this works
Shows you the ongoing costs and helps you understand how much you'll need to pay the franchisor on a regular basis.
3What are the training and support programs available to franchisees?
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What are the training and support programs available to franchisees?
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Why this works
Reveals the support system and helps you understand what training and assistance you'll receive to run the business successfully.
4What are the territory restrictions and how is the market protected?
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What are the territory restrictions and how is the market protected?
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Why this works
Shows you the market protection and helps you understand whether you'll have exclusive rights to your area and how competition is managed.
5What are the financial performance representations and what can I expect to earn?
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What are the financial performance representations and what can I expect to earn?
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Why this works
Reveals the earning potential and helps you understand what kind of income you can realistically expect from the franchise.
6What are the marketing and advertising requirements and how much will they cost?
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What are the marketing and advertising requirements and how much will they cost?
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Why this works
Shows you the marketing obligations and helps you understand what marketing activities you'll need to do and how much they'll cost.
7What are the equipment and inventory requirements and where do I source them?
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What are the equipment and inventory requirements and where do I source them?
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Why this works
Reveals the equipment needs and helps you understand what equipment and inventory you'll need and where to get them.
8What are the lease and location requirements and how do I find a suitable site?
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What are the lease and location requirements and how do I find a suitable site?
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Why this works
Shows you the location requirements and helps you understand what kind of location you need and how to find it.
9What are the staffing requirements and how do I hire and train employees?
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What are the staffing requirements and how do I hire and train employees?
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Why this works
Reveals the staffing needs and helps you understand how many employees you'll need and how to hire and train them.
10What are the operational procedures and how do I run the business day-to-day?
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What are the operational procedures and how do I run the business day-to-day?
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Why this works
Shows you the daily operations and helps you understand how to run the business and what procedures you need to follow.
11What are the quality standards and how are they enforced?
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What are the quality standards and how are they enforced?
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Why this works
Reveals the quality requirements and helps you understand what standards you need to maintain and how they're enforced.
12What are the technology requirements and what systems do I need to use?
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What are the technology requirements and what systems do I need to use?
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Why this works
Shows you the technology needs and helps you understand what systems and technology you'll need to operate the business.
13What are the insurance requirements and what coverage do I need?
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What are the insurance requirements and what coverage do I need?
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Why this works
Reveals the insurance needs and helps you understand what insurance coverage you'll need to protect your business.
14What are the legal obligations and what contracts do I need to sign?
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What are the legal obligations and what contracts do I need to sign?
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Why this works
Shows you the legal requirements and helps you understand what contracts and legal obligations you'll have.
15What are the exit strategies and how do I sell or transfer the franchise?
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What are the exit strategies and how do I sell or transfer the franchise?
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Why this works
Reveals the exit options and helps you understand how you can sell or transfer the franchise if you want to exit.
16What are the renewal terms and what happens when the franchise agreement expires?
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What are the renewal terms and what happens when the franchise agreement expires?
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Why this works
Shows you the renewal process and helps you understand what happens when your franchise agreement expires and how to renew it.
17What are the dispute resolution procedures and how are conflicts handled?
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What are the dispute resolution procedures and how are conflicts handled?
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Why this works
Reveals the conflict resolution process and helps you understand how disputes with the franchisor are handled.
18What are the success rates and what percentage of franchisees succeed?
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What are the success rates and what percentage of franchisees succeed?
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Why this works
Shows you the success statistics and helps you understand what percentage of franchisees succeed and what the failure rates are.
19What are the common challenges and what problems do franchisees typically face?
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What are the common challenges and what problems do franchisees typically face?
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Why this works
Reveals the potential problems and helps you understand what challenges you might face and how to prepare for them.
20What are the best practices and what advice do successful franchisees have?
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What are the best practices and what advice do successful franchisees have?
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Why this works
Shows you the success strategies and helps you understand what successful franchisees do and how you can learn from them.
How to Evaluate Franchise Opportunities
Expert tips and techniques for getting the most out of these questions.
Best Practices
Focus on Financial Understanding
Ask questions that help you understand the financial requirements, costs, and potential returns. Look for clear financial information and realistic projections.
Assess Support and Training
Ask about the training and support programs available. This is crucial for understanding how the franchisor will help you succeed.
Evaluate Market and Competition
Ask about territory protection, market conditions, and competition. This helps you understand the market opportunity and potential challenges.
Question Sequences
The Financial Analysis Series
The Support and Training Series
Common Pitfalls
Don't Focus Only on Initial Costs
While understanding initial costs is important, also ask about ongoing fees, royalties, and operational costs. Look for a complete picture of all financial obligations.
Don't Ignore Support and Training
Ask about the training and support programs available. This is crucial for understanding how the franchisor will help you succeed and what resources you'll have.
Don't Overlook Market and Competition
Ask about territory protection and market conditions. This is important for understanding the market opportunity and potential challenges you might face.