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Key Training & Support Questions to Ask When Buying a Franchise

Opening a franchise is the beginning of an educational journey, and it’s the responsibility of the franchise owner to learn as much as possible about their business, their market, and their customers in order to maximize their chances of success. Thankfully, you don’t have to go through the process alone. Your franchise company will usually provide help in the form of training opportunities and other support structures, but it’s crucial to know what you’re going to receive before you sign an agreement.

What does the initial training period entail?

Almost every franchisee’s journey with the company will begin with an initial training period. Typically, these sessions are conducted at company headquarters, or at “corporate university” or training campus if the business is large enough.

But while every franchisee is likely to undergo some type of structured training, the length, intensity, and experience can vary wildly depending upon the company in question. It could be anywhere from a day spent reviewing manuals to a month of intensive hands-on experience with operational techniques. It’s important to ask your franchise representative to explain the processes in detail so that you can decide whether or not the training program is sufficient for your needs.

What sort of training and support opportunities exist beyond the initial period?

While the initial training period is designed to put you on firm footing as you open your franchise location, it shouldn’t be the end of your education with the franchise. Ideally, you will receive ongoing training and support as a valued franchise owner whenever the situation warrants it. If new operations systems are developed, will the corporate company bring franchise owners back on site for updated training?  Does the franchisor offer extended development modules that allow franchise owners to hone their skills in specific areas?

Are any royalty payments used for specific training initiatives?

Many potential franchise owners are aware that royalty payments are often levied in order to help the parent company pay for a variety of expenses, including national marketing and advertising. However, some of these royalty payments may also be allocated to ongoing training. Ask you franchise representative to explain the training budget for the company in detail, and you may get an idea of what priority franchise owner support is for them.

What do other franchisees have to say about their training experiences?

Employees of the franchise company should be able to explain the training programs in detail to you, but it also helps to get a first-person account from someone has gone through the experience. Seek out reviews from your fellow franchisees, and don’t hesitate to reach out to them directly and inquire about their experiences.

What are the most significant problems most franchises face?

When franchise owners need support from the corporate company, what are the main reasons for it? This is a question that can have serious implications for your business because you are likely to encounter similar situations throughout your ownership journey. Learn what common issues you may face, and also how franchise owners work with the franchisor to resolve them.

Is there any assistance offered for choosing a site?

While some service franchise owners won’t even have to worry about selecting a site location, for many others (and of course, for retail franchises as well) this will be one of the most important decisions you make. If you are gong to be opening a physical office location, it’s worth asking the franchise representatives if they provide any assistance with the location selection process. They may have a list of preferred sites, cost analysis projections, or market research data that can help predict foot traffic levels.

Next Steps

If you’re considering a franchise investment or just have questions, feel free to contact one of our franchise specialists to learn more about the process and all the different franchise opportunities by completing our request form or calling 1-877-650-5551.

operational questions

Key Operational Questions to Ask When Buying a Franchise

Operating a franchise unit is a considerable logistical undertaking, and potential franchise owners need to be prepared for a wide variety of different challenges and outcomes that they will likely come across.

Do my operational capabilities match with the requirements of the franchise?

Every franchisee and franchise company is unique. Some people want to own a business that they can operate in a largely hands-off capacity while they tend to their other responsibilities, be they professional or personal. With some franchises this is easy, but there are many others that require more active involvement from the owner in order to be optimally successful.

Before committing so much of your time, money, and energy to operating a franchise, you have to know if it will be possible to achieve your specific goals within the ecosystem of that company.

What will my operating budget most likely look like?

Scrutinizing the books of a franchise unit will usually tell you more about its operational realities than any other activity. Parsing through the budget will show you exactly where, when, and how franchise owners just like yourself are spending money in order to keep things rolling. Before you pull the trigger, ask the franchise representative for concrete examples so that you will have an idea of your expected cost structure, and can prepare for the specific challenges of doing business.

What is the average length of time between signing the agreement and opening a location?

What kind of logistics are involved in opening a unit of this franchise, and how long does the process typically take? Many residential service franchises can be off the ground and running with nothing more than a few branded materials and a single employee. On the other end of the spectrum, some complex retail businesses require hiring a full staff, choosing a site location, construction, training, etc. before they can even open the doors.

What are the most common operational issues that franchise owners face?

Setbacks are going to occur when you operate a franchise; there’s no way around it. The factors that will ultimately influence your success or failure as an owner will be the kinds of issues that plague you most frequently, and how well-equipped you are to respond to them. For instance, if equipment breakdowns frequently require professional service, it will significantly alter how you budget for emergency maintenance.

What is this franchise’s core operating value proposition?

In other words, how does this franchise actually make money? What is the central value that it provides to its customers? Is it convenience, outstanding customer service, or proficiency in a specialized skill? Before opening your business, you have to have a concrete idea of what will keep your customers coming back so that you can emphasize this value throughout your operational strategy.

What do I need to know about human resources management?

If your franchise employs even a single person, employee relations is going to be a significant part of your operations. Human resource management is a vast field filled with many different subject areas, and you can’t possibly be expected to become an expert before you sign your franchise agreement. However, it’s wise to get an idea of the major human resources issues that you will be dealing with, including salary/benefit structure, legal concerns, union membership, and corporate HR assistance.

What’s the day-to-day experience of working in a franchise location like?

If you want the real experience of operating the franchise unit, walk a mile in another owner’s shoes; or at least shadow them for a few days while they complete their tasks. Ask your franchise representative if there are opportunities to observe other franchise owners and managers as they go about their day-to-day responsibilities.

Next Steps

If you’re considering a franchise investment or just have questions, feel free to contact one of our franchise specialists to learn more about the process and all the different franchise opportunities by completing our request form or calling 1-877-650-5551.

legal questions

Key Legal Questions To Ask When Buying A Franchise  

Purchasing a franchise is a legally-binding agreement, and therefore there are numerous legal concerns involved in the process. As part of your cursory research, make sure to ask every franchisor you interview these important legal questions as you consider your options.

Is any legal assistance provided by the franchisor, and in what situations?

In certain instances, some legal matters may be under the umbrella of the franchisor, and they may, therefore, provide legal help relating to arbitration, contract negotiation, or litigation. This sometimes occurs in human resource/Union relations issues, government matters, copyright/trademark issues, etc. it will be helpful to know about these situations when you are budgeting for your legal help so that you can allocate accordingly.

What is the litigation history of the corporate parent?

Learning about the legal history of a company can tell you a great deal about its values and the way it operates. Before entering into any franchise agreement, carefully scrutinize the legal history of the company in question. What kinds of suits have been brought against the company? Do they have a strategy or threshold for settlements? Are there any patterns that can be identified by the way legal complaints are brought forth and handled?

Is the corporate organization currently involved in any pending lawsuits?

Understanding past legal issues is very helpful, but it’s also important not to overlook the present ad future. As a corollary to the previous question, it’s also crucial to ask whether or not the company is currently involved in any legal disputes that could affect its future.

What is the process for handling disputes between the franchisee and franchisor?

Everyone wants to be optimistic and believe that their relationship with their franchisor will always go smoothly, but disputes are an inherent part of business relationships. The important thing is how disputes are resolved, which is why you must ask your potential franchise company to outline their specific processes for dispute resolution.

Do you assist in negotiating leases?

Certain types of service franchises don’t even need a physical space to operate, while real estate for a storefront is often the primary concern and expense for retail franchises: such is the diverse nature of the franchising world. If your company is going to need to rent a physical space, then you will want to know what the process is with regards to the franchisor. Are you expected to hire your own real estate attorney to review contracts and leases, or is in-house assistance provided by the company?

What will happen to my business if the franchisor declares bankruptcy?

Bankruptcy hearings bring a multitude of uncertainties, so it’s best to have some idea of what will occur in the unfortunate case that it ever comes up. Keep in mind that bankruptcy laws are dependent upon the type of bankruptcy that is being filed, and they also vary depending upon the state.

What is the process for altering contracts?

Contracts are obviously executed in order to answer potential legal questions, but that doesn’t mean there aren’t times when they need to be changed. Does the franchisor have the right to make changes to agreements without your consent? Are you able to sell your stake in the franchise at any time, and is there a fee involved? If you co-own the franchise, what are the legal requirements and procedures for dissolving a partnership?

Are you aware of any legal and regulatory issues unique to my area?

The laws that govern commerce can be vastly different depending upon what state your franchise business is operating in. Certain industries are much more tightly regulated in specific states, and penalties may apply if guidelines are not followed to the letter. To give an example, certain states require franchise restaurants to disclose calorie counts if the company operates a minimum number of units in the area.

Next Steps

If you’re considering a franchise investment or just have questions, feel free to contact one of our franchise specialists to learn more about the process and all the different franchise opportunities by completing our request form or calling 1-877-650-5551.