Purchasing a Franchise: Questions for Franchisees
By Michael D. Cross, Jr., J.D.
In determining whether to purchase a franchised business, it is important to investigate and consider the franchise opportunity. A purchaser may obtain much information from the Uniform Franchise Offering Circular and proposed Franchise Agreement provided by the franchisor; however, it is important to know that this is not all the information necessary or appropriate to make the decision to purchase a franchise. In addition to asking questions of the franchisor, it is often helpful to speak with other franchisees in the system.
Among the questions to ask franchisees are:
- What type of business experience did you have before purchasing this franchise?
- Do you believe the training you received from the franchisor was sufficient to help you run this franchise efficiently?
- What additional training do you believe would be helpful to a new franchise?
- Did you purchase an existing franchise or start a new one?
- Do you own any other franchises in this system or in other franchise systems?
- Did the franchisor provide an accurate estimate as to the costs of starting and operating this franchise?
- Were there any costs or charges that you did not expect (whether assessed by the franchisor or by others)?
- Are you restricted as to the vendors you may use?
- Does the franchisor advertise as much you thought it would? As much as you believe is appropriate?
- Is the territory you have been allocated sufficient to allow you to meet your goals?
- Are your earnings in line with your expectations?
- If you could go back in time to when you purchased this franchise, would you do it again?
- What would you change?
- Are you happy with the franchisor?
Though these questions will not necessarily lead to all the information a purchaser needs, the answers may help substantially and guide a purchaser in making the decision as to whether to purchase a franchised business.
The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.