What to ask a franchisor?

You have picked a franchise that interests you now you should put the franchisor in the "hot seat".  Getting the most out of your meetings with a franchisor is vital if you want to obtain the key information that will be the deciding factors on whether you choose a brand.

Among the information you will need to unearth is how long the franchisor has been posting profits, when did the company start franchising, how many franchise owners it has, and the speed at which the franchise network is growing.

Getting Started
You will want to know what you will receive for your investment.  Your initial training is likely to be included, but will it include staff training?  If you are starting out solo, you may employ staff as your business expands.  If so, will the franchisor require all staff to be trained by head office and, if this is the case, how much of this cost will fall on your business?

Setting boundaries
Another important consideration when investing in a franchise is the exclusivity of your franchise - is it a single unit or is it a territory within set boundaries.

Value for Money
In addition to your initial investment you will be expected to pay management service fees to the franchisor to provide you with support.  For instance, some franchisor's operate a sales department dedicated to generating initial business for their franchise owners from launch day. Alternatively, the franchisor may take total control of the sales process, providing you with a constant flow of business and leaving you to concentrate on providing the service.

Counting the Cost
This will involve quizzing the franchisor about how much working capital you will need, how long it will take for your business to break even and the growth level current franchise owners are achieving.  Ideally you should request that your accountant or bank manager check these figures out, but receiving a green light from these people is no assurance of success.  They are merely confirming the figures look fine on paper, not their precise knowledge of all the risk factors involved with your selected franchise opportunity.

Looking Ahead
After a few meetings with the franchisor you will have a good idea of your role in operating the franchise - whether you will be required to be hands-on in delivering the service or taking on a more managerial role.
You must ask yourself whether what you hear corresponds with your own goals, and then query whether you will be able to move into the latter category if you see yourself expanding the business at a later date.
 
Before making your final decision, make sure you clearly understand about the franchise you have chosen and about all the elements that make it a success.  This is why it is important to make your questions really matter to make your foray into franchising a success.