Franchises are often described as businesses with a safety net, or a business-in-a-box. While these metaphors do a good job of highlighting the fact that there is usually less risk and stress involved in purchasing a franchise as opposed to starting a business on your own, they don’t prepare a potential franchise owner for the level of research they should undergo before deciding to purchase a franchise.
Why do you need to do your research? Because while it’s true that purchasing a franchise may provide you with an established brand, administrative support, and many other benefits, it’s still a big commitment. Investing in a franchise is an investment in yourself, but also in the franchisor.
So, how do you make sure you’re prepared? To start you off, we’ve gathered a list of top questions to ask your franchise sales person before purchasing:
- How long will it take for me to break even?
You’re going to want to know when you can first expect to start breaking even so you can prepare yourself financially. If it typically takes several months to break even, and longer to become profitable, you’ll want to know so you can make the most informed decision.
- How do they choose their franchise owners?
Franchisors look for franchise owners that represent their brand. They may be looking to see if you align with the company in terms of personality and skillset. Similarly, it’s good to know that a franchisor has some sort of vetting process for selecting their franchisees.
- Is the franchisor in a strong position, financially?
Before you invest your time and money into a franchise, you’ll want to know whether or not the franchisor is in good financial standing. After all, you’re investing in this company as much as they’re investing in you. A franchisor’s FDD (Franchise Disclosure Documents) will disclose their financial statements and provide you with a better idea of their income.
- What’s my income potential?
This question is key when it comes to determining if a franchise is right for you. Ask what the average earnings are for a franchisee, and whether or not there is capacity to grow. This is significant when it comes to making your final decision. You might be happy to run a business of a certain size, or you may want more out of your franchise over time.
- What makes them different from other similar franchises?
Ask what sets this franchisor apart from other franchisors in the same industry. What training and support do they provide? What’s the potential to grow the franchise? What makes them special?
- What support is provided by the franchisor?
Finding out how much support you’ll receive from the franchisor will be a good indication of what you’ll get out of your purchase. Some franchisors will provide a week or two of training, and then the franchisee is expected to operate independently after that, whereas others will be more hands-on, and will provide support on a more frequent basis. Asking this question will allow you to determine what you want out of your franchise and make the decision that’s right for you.
OpenWorks’s best in class commercial cleaning franchise business model is unique because it takes a comprehensive approach to helping franchisees meet the challenges of operating their businesses. To learn more about our franchise opportunities, visit our website here.