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12 Questions To Ask The Franchisor

Making the decision to purchase a franchise is not only a big financial decision but can take a toll on your mental well-being as well.  Meeting with the franchisor can be intimidating and overwhelming but going into the meeting or Discovery Day armed with some prepared questions can help alleviate your stress a bit and cut through the glitz and glamor of the sales pitch.  Here are 12 initial questions you should be sure to ask the franchisor:

  1. Are you obligated to purchase products, services or supplies from the franchisor or its affiliates? If so, are they priced at a markup or sold at wholesale value?
  2. Do you have an exclusive territory? If not, why not? How is the territory defined?
  3. Are there any transfer restrictions?
  4. What are the renewal conditions and options?
  5. Does the franchisor review the lease for business space? Does the franchisor have to approve the space?
  6. What are the upfront fees?
  7. What are the ongoing fees? What do I get for those fees?
  8. Who is in charge of marketing, operations, and business development?
  9. When I have a question as a franchisee owner-operator, who do I ask it to?
  10. Who is in charge of quality-control for the franchise system?
  11. Who oversees the internet, social media & digital aspects of the franchise?
  12. Who do I turn to when I need help, fast?

Although the answers to some of these questions can be found in the Franchise Disclosure Document or the Franchise Agreement, it is always a good idea to ask the franchisor to elaborate on the provisions in the FDD and agreement.  Being able to gauge the franchisor’s reactions and the manner in which they answer your specific questions may be more telling than the answers themselves.  Always be sure to take a pen and paper or a device to take notes during Discovery Day or your meeting with the franchisor to write down any follow up questions and anything that stands out to you, either good or bad, because the more information you have, the better decision you can make.