Franchise validation is one of the most critical steps you need to take when looking for the perfect franchise to buy. It involves interviewing franchise owners who have already invested in the franchise concept you are interested in. This process will let you know whether or not a particular franchise opportunity is good for you.
A section of the franchise disclosure documents (FDDs) includes a list of every franchisee of the parent company and, usually, their contact information. You may ask the franchisor for help in finding franchisees to talk to, but it’s advisable to choose the franchisees to speak to yourself.
The best way to get the most out of your conversation with franchisees is to come up with a list of questions based on what you want to learn during the validation process. Do you want to learn about the daily routine in the business? About the experience of the franchisees with customers or their employees? Maybe you want to know the role the franchisor will play before making your decision. Franchisees are busy people, so you need to be respectful of your time. It’s also crucial that you arrange your questions in order of importance since you may not be able to get to all of them during this process.
Every franchise system will have a wide range of franchise owners, from high performers to low performers and everything in between. Try to talk to franchisees from each category. Note the bad thing one franchisee tells you and ask the other about it. The higher the number of franchisees you talk to, the better the insight you will have about the franchise business.
10 Questions to Ask When Interviewing Franchise Owners
- What has been the most fulfilling part of being a franchise owner? What has been your biggest unexpected challenge so far? The answers you get will let you know how well the expectations of the franchises have been met.
- What were you doing before becoming a franchisee? Knowing the background of the franchisees can give you an idea of their personality and skill sets that align with the particular franchise opportunity.
- Were the franchisor’s training and assistance in setting up your franchise location enough? What do you think they could have done differently? One of the advantages of investing in a franchise is that you are not operating alone. If the franchise system is a good one, you begin to receive support and guidance even before you open your doors. Ask the franchise owners how well prepared they felt when they launched their business and what they think the franchisor should include in the training.
- How has the franchisor’s support been since you start operating the business? Franchisors typically assign one of their employees, usually called an area representative, who will visit your franchise location from time to time. The job of this person is (i) to help you with the daily operations of the business and (ii) to make sure you are following the guidelines provided by the franchisor. Ask the franchise owners about the kind of assistance they have received from the franchise area representative. How frequently do they pay them a visit? Overall, does the franchisee feel like they are well supported?
- Do you have access to the franchisor when you need their help? There are limits to the help you can get from the area representative. You will need to contact someone from the franchise headquarters to resolve certain issues. Ask the franchise owners what issues have made them contact a senior member of the franchisor’s team. How satisfied were they with the attention paid to their concern and its resolution? You don’t want a situation where it feels like your investment does not matter to the folks at the franchise’s headquarters.
- How many hours do you work per week? Is that higher, lower, or just what you expected when opening the franchise? A lot of people decide to become business owners because of the flexibility it affords them. However, that does not occur in the early days of the business. Many franchisees have to work many hours a week in the first few years of operation. Ask the franchise owner if investing in the franchise has allowed them to have a better work-life balance. If they answer “no,” ask if they see that happening anytime soon.
- What assistance does the franchisor offer when it comes to marketing? A lot of franchise owners have skills that they bring into the business. Some have experience in sales or management. Others have expertise in the area the franchise concept is focused on. However, many of them don’t have experience in marketing. All the business skills and talent you have will not mean anything if you are unable to bring traffic to your doorstep. Franchisors know that many franchisees are not good at marketing and strive to help them overcome this. A lot of franchisors set up a marketing department that handles marketing both at the local and national levels. Find out if the franchisees are getting the bang for the money they pay as their contribution to the marketing fund. What kind of local marketing efforts does the franchisor provide assistance with? How crucial is social media, and what tools does the franchisor advise the franchise owners to use?
- Are you satisfied with the financial returns so far? Can you say that you’re on the right track to reaching all of your financial goals? Avoid the temptation of asking the franchisees “how much they make.” That’s an intrusive question that many franchise owners will not want to answer. Just asking them how satisfied they are with their financial performance so far will reveal a lot. If they are not satisfied, what do they say is the cause? Do they think they will be able to overcome present challenges and finally reach their goals? If you are lucky, you may see some franchisees who are very transparent with their financials and ready to disclose every single detail to you.
- What advice do you have for me as I continue with the exploration process? What do you wish you have done differently while researching the franchise opportunity? Is there any question you wished the franchisor had asked? Is there any information they discovered later that they thought you should know before signing the franchise agreement?
- If you had the chance to go back in time, would you still go ahead with the investment? The franchisee’s answer to this question can let you know their overall experience with the business.
Pondering on the right questions to ask franchisors?
As a prospective franchisee, you need also need to ask a franchisor a lot of questions before joining their franchise system. Don’t invest your money and time into a business unless you have all the necessary information. We suggest that you look at these important questions to ask the franchisor when considering a franchise opportunity.
