Step 4: Research
Ask the right questions of franchisees and franchisors, review credible resources, and learn how to make the most of Discovery Days.
Knowledge equates to confidence in your franchise journey – the more you know the better and more informed decision you will make. The research step will help qualify your thinking and to help keep track of your progress.
In this step, you should look at FBR’s independent franchise reviews and understand how a company rates in franchisee satisfaction. You also want to make sure you are prepared to speak with franchise company representatives and franchisees. We will arm you with a list of important questions and help you understand the key areas to review in a Franchise Disclosure Document (FDD).
Top Questions to Ask the Franchisor
- What traits & skills do I need to have to be successful?
- What level of training & support do you offer?
- Is there a set territory?
- How does the franchisor prevent its franchisees cannibalizing business from each other?
- What are the terms of the agreement?
- What does the future of the business look like?
- What is the expertise/experience of the executive team?
- How many existing franchise owners are there?
- How many franchise owners have failed? Why did they fail?
Top Questions to Ask the Franchisee
- Did your opening go as planned?
- Were you satisfied with the training?
- How much day-to-day support do you get?
- Tell me about your revenue growth trends
- Is the profitability inline with your expectations?
- Do you have strong relationships with other franchisees?
- If you had to do it all over again would you?
Understanding the Franchise Disclosure Document (FDD)
All franchise companies are required by law to provide serious prospective franchise candidates with a copy of their Franchise Disclosure Document or “FDD” before they can purchase a franchise. While these documents can be confusing to someone not familiar with franchising, we have two great articles to help break them down for you: