Validating Your Franchise Options: 7 Questions to Ask Franchisees

As you narrow your search for the right franchise, be sure to reach out to franchise owners at your tops contenders. Current franchisees are often the best sources for unbiased and unfiltered information and can help you validate or invalidate the franchises you are considering.

7 Important Questions to Ask Before You Buy

  1. Opening: Did the opening of your business go according to plan?
  2. Training: How effective and useful was your initial training? Are you satisfied with the ongoing training provided by the franchisor?
  3. Support: How much franchisor support do you receive on a day-to-day basis?
  4. Revenue: What was your first year gross revenue? What is it now? When did you make a profit?
  5. Profitability: Has turnover and profitability been in line with your expectations and those laid out by the franchisor?
  6. Franchisee Community: How helpful are the other franchisees in your system? How often do you reach out or speak with your fellow franchisees?
  7. Open Ended: What do you wish you had known going into business that you did not? Is there anything you would have done differently?
Opening

1. Did the opening of your business go according to plan?

It is nearly impossible to plan for everything, but since franchisors have helped numerous franchisees launch their businesses there shouldn’t be too many unexpected variables. Of course, every franchise system and franchisor is different and provides varying levels of support — so ask other franchisees for their first-hand experience. Ask them what didn’t go according to plan and what surprised them.

Training

2. How effective and useful was your initial training? Are you satisfied with the ongoing training provided by the franchisor

Training and support are important for franchisees, especially if you are entering an entirely new industry where you have no prior experience. So, just as you should ask the franchisor about the level of training they will provide, be sure to vet their response with the actual experiences of franchisees in the system. Beyond initial training, most franchisors will offer ongoing training, which can help keep you up to date on industry trends or system improvements and changes. Ask the franchisees you speak with you rate the training on a scale of 1-10. What did they find most useful and in what area do they wish they received more in-depth training?

Support

3. How much franchisor support do you receive on a day-to-day basis?

Support is one of the many benefits of buying into a franchise system. As Jane McElhaney of Our Town America remarked when asked what she likes most about her franchise organization, “Our corporate office provides excellent support and training. They are also constantly innovating with cutting edge technology and new marketing tools. In the Our Town America franchise system the franchisees pull together to contribute to each other’s success. It’s like one big family helping and looking out for each other.” Be sure to ask for specific examples of how the franchisor provides support and how easy it will be for you to request support day in and day out.

Revenue

4. What was your first-year gross revenue? What is it now? When did you begin turning a profit?

While a franchisor can give you estimates and averages, a franchisee can provide real individual data on profitability and revenue. This is of course one of the most important areas to explore with franchisees of any brand you are considering, as it will help you better understand the true numbers behind the investment you are considering.

Profitability

5. Has turnover and profitability been in line with your expectations and those laid out by the franchisor?

Not only does this question help you to understand potential profitability of the franchise you are considering, it also helps you gauge the accuracy — and in some cases, the honesty — of the franchisor.

Franchisee Community

6. How helpful are the other franchisees in your system? How often do you reach out or speak with your fellow franchisees?

The franchisee community can be a tremendous asset to new owners or even those who have owned their business for years. As Lindsay Verdun of TSS Photography remarked, “I think what I love most about our franchise organization is that we truly have a family atmosphere. We have so many colleagues that we now call friends. We love being able to share our knowledge on professional levels and offer compassion and an ear on personal matters as well. It’s the relationships we have developed in this business that keep us going during the tough times.”

Open Ended

7. What do you wish you had known going into business that you did not? Is there anything you would have done differently?

The answers to this question can be very interesting and extremely helpful as you set out on your franchising journey. You’ll hear responses that are general to franchising and you’ll also get answers that are very specific to the business or industry you are interested in. For instance, when asked what he would have done differently looking back, Dennis Monroe, who owned a ColorAll franchise from 2005 to 2014, said, “If possible, I would have negotiated a tapered franchise fee and a reduced minimum franchise fee … 7% or a $1,000 minimum is a large load during down markets. Also, when the company was sold the new owner did not provide the same level of support as the previous owner; therefore, an opt-out option upon sale of the company would have been better for our situation.”

How to Find Franchisee Contact Information

Most franchisees will be more than willing to offer their advice and share their experience with you. They have all been in your shoes and likely went through the same validation process. You can find a list of all current franchisees and their contact information in the Franchise Disclosure Document (FDD). Here you’ll also see contact information for any franchisee who left the system in the prior fiscal year.

In addition to speaking with franchisees, you can review franchisee satisfaction reports published by Franchise Business Review. These reports offer third-party survey data across several categories. Reviewing third-party reports, speaking with franchisees, and asking tough questions of franchisors are all important steps in the franchise validation process.

Includes owner satisfaction report
out of 100

Wild Birds Unlimited

Industry: Pet Services, Retail

Wild Birds Unlimited provides a comprehensive array of bird feeding products, as well as local nature information.

Investment: $197,919 - $325,763 Cash Required: $40,000
FirstLight Home Care senior care franchise opportunity caregiver with elderly
Includes owner satisfaction report
out of 100

FirstLight Home Care

FirstLight Home Care provides home care services, helping seniors and people recovering from illness, injury or surgery, adults with disabilities, veterans and anyone 18 and older who need in-home sup…

Investment: $113,300 - $197,900 Cash Required: $100,000
Includes owner satisfaction report
out of 100

Any Lab Test Now

Any Lab Test Now provides direct access to clinical, DNA and drug and alcohol lab testing services, as well as phlebotomy and other specimen collection services, through a retail storefront business m…

Investment: $133,900 - $227,900 Cash Required: $90,000