1. How long have you been with the Franchise?

2. What made you choose the (INSERT NAME) franchise?

3. What is your current monthly revenue?

4. How long did it take you to make a profit or when are you forecasted to?

5. What was your forecasted break even point and what is it in reality?

6. Are you paying a monthly management fee or commission? If so How much?

7. Did the training course meet or exceed your expectations? 

8. Was there anything you thought was missing from the training?

9. Did you feel that the training course provided you with tools that were not in the public domain - i.e standard  books e.t.c    

10. Did you have the legal contract checked out? If so what were the comments?    

11. Did you have any changes to the contract made?   

12. Did you pay the full list price for your licence and training? 

13. How do you feel about the franchise business?

14. How is your relationship with the management staff at the franchise?

15. Are you aware of any disputes within the franchise? If so can you give details.

16. Are you satisfied with the marketing the franchisor provides?

17. Have you ever gained clients/customers as a result of the franchisors marketing efforts?

18. Knowing what you know now, would you buy the franchise again?

With a recognised brand name often put forward as being one of the important most valuable parts of a franchise I have given you a few questions to think about when looking at a potential franchisor.

 Did you ever hear of the franchise you are considering before you investigated franchises?

 Has anyone you know ever heard of them?

 Have any of your potential clients/customers ever heard of them? A good bit of due diligence around this one question alone can prove invaluable.

 Have any industry commentators i.e trade press, specialists, forums e.t.c ever heard of them?

 For the type of business you are going to be in is a national brand really needed?

 If a national brand is beneficial is there any way of putting a financial value to it? How much are you prepared to pay someone just to access the brand name.

 What plans does the franchisor have to develop and grow the brand?

 What does the brand mean and stand for? Any good well developed brand will convey planned images, associations and meaning to a customer. Ask the franchisor what their brand stands for and judge their response. If they can’t tell you then is it worth paying a premium for?

I am in the process of launching a new book aimed at prospective franchisees and would welcome your input and feedback.

If you would like a copy of the book for FREE prior to launch then have a look at the site   Franchise Book

It would be welcome to get some feedback, input and possibly some testimonials.

A while back I commented on the number of franchise information sites that are merely advertising portals designed for no other reason than to earn income from advertisers. They have minimum amounts of content and provide no real value if you are seeking franchise information.

While doing my research i came across a site that is refreshinglt different. http://www.bluemaumau.org/  provides the usual adverts for franchises but has a fantastic amount of relevant content and information. It has a mix of contributers from franchisors, franchisees and franchise consultants. If you are looking to buy a franchise i would suggest you also have a trawl through this information site and their franchise forum.

A great piece of information that is important to all franchisors and franchisees is that of Scott Shane and Chester Spell who demonstrate that ¾ of all franchise systems fail within the first 12 years, and less than 1 in 4 survives until the end of the contract.

Originally published in the Sloane Management review in 1998 the article is one of the more common sense pieces of writing covering the franchise industry.

They identified a number of important franchise success factors that should be used to assess the likely success of a franchise system. They are:

• Rapid growth (or planned rapid growth) of the franchise means that they can begin to reach a level to compete with existing players in the marketplace.

• Local management support of the franchise aids rapid growth

• Demonstrable trustworthiness and high quality systems

• A recognised successful history before franchising. This resulted in a recognised ‘brand name’ that could not be easily copied. Systems, marketing, premises e.t.c could be easily copied by competitors – a brand could not
• Economies of scale i.e cheaper costs because they are larger, in marketing. This was achieved through being a bigger brand.
• Rapid growth of the franchise allowed the brand name to develop quickly and stop competitors from copying or replicating the business idea.
• Using local franchisees to use their local knowledge to determine local business decisions and operate with fewer ‘local field operations’. This means the franchise resources can be concentrated on branding, marketing and growth. The entrepreneurial ‘drive’ of the franchise owner is concentrated on building the business. The opposite of this is by keeping close control on local franchisees by appointing Master Franchisees. This was shown to develop ‘passive ownership’ which undermines the entrepreneurial incentives of outlet ownership. The said “therefore growing quickly, through master franchising, increases the probability of system failure”

• Franchisees should seek franchisors that are expanding rapidly.
• Franchisees should not seek a franchise that promises a lot of field support
• A lean operation at headquarters is a success predictor
• Franchisees should seek franchisors with strong brands or at least a plan as to how they will develop a strong brand
• Franchisees should be a member of a regulatory body
• Franchisees should be wary of franchises that offer master franchising. Whilst this speeds growth it also increases the likelihood of failure.