Why Asking the Right Questions Matters
Choosing a franchise is a major financial and career decision. While franchisors provide marketing materials and presentations, the best way to truly understand a franchise is by asking direct and strategic questions.
When you meet a franchisor face to face, you have the opportunity to gain real insights into their business model, support system, and overall success rate. Asking the right questions will help you determine if the franchise is a good fit for you and whether it aligns with your financial, professional, and lifestyle goals.
This guide will walk you through 20 critical questions to ask a franchisor, covering financials, training, operations, market potential, legal considerations, and long-term growth.
Franchise Fees and Financial Structure
1. What is the total initial investment required?
Ask about:
- Equipment and inventory costs
- Real estate and leasehold improvements if required
- Working capital requirements
2. What are the ongoing fees, and how are they structured?
Most franchises charge royalties and marketing fees. Clarify:
- The percentage or fixed amount you will need to pay
- What services are included in these fees
- Whether fees increase over time
3. What financing options are available?
Ask if the franchisor offers direct financing, third-party lender partnerships, or guidance on SBA loans.
4. When can I expect to break even and turn a profit?
Every franchise operates on different financial timelines. Ask for average profitability timelines based on real franchisee data. If it is not available this is a key question to be asking other franchisees during validation.
Training and Operational Support
5. What kind of training do you provide for new franchisees?
Strong training programs help franchisees succeed. Ask about:
- The length and depth of training
- Whether it includes hands-on experience
- If training covers marketing, operations, and hiring
6. What ongoing support do franchisees receive?
Support after launch is just as important as initial training. Clarify:
- The level of mentorship and coaching
- If there is 24/7 operational support
- How often franchisees receive updated training
7. What marketing and advertising support do you provide?
Successful franchises offer marketing tools and national brand campaigns. Ask:
- How marketing fees are spent
- If you will receive local marketing guidance
- Whether there are digital and social media strategies
Market Potential and Competitive Advantages
8. How is your franchise different from competitors?
You need to understand the unique selling points of the franchise. Ask about:
- Proprietary systems, products, or technology
- Brand reputation and customer loyalty
- How they differentiate in a crowded market
9. What kind of research supports your market demand?
Franchisors should provide data on customer demographics, market size, and industry trends. If they cannot, it could be a red flag.
10. Are territories exclusive, and how are they defined?
Exclusive territories reduce competition between franchisees. Ask:
- If you get a protected market area
- How territories are determined
11. How do you handle market saturation?
A growing franchise should strategically expand without hurting existing franchisees. Find out how they balance growth.
Contract Terms and Legal Considerations
12. What is the length of the franchise agreement?
Standard contracts last five to twenty years. Make sure you understand:
- Your rights and responsibilities
- The renewal process
13. What are the restrictions in the franchise agreement?
Some agreements limit:
- How you can market your business
- Where you can operate
- What products or services you can offer
14. What are the conditions for terminating the contract?
Ask about:
- What would lead to termination
- Whether franchisees have a grace period to fix issues
15. Can I sell or transfer my franchise?
If you ever want to exit the business, you should know:
- If there is a resale process
- Whether the franchisor has a first right of refusal
The Franchisor’s Growth and Track Record
16. How many locations have opened and closed in the past five years?
If a high number of locations have closed, it could indicate a problem with the business model.
17. Can I speak with current and former franchisees?
The best way to get honest insights is by talking to:
- Successful franchisees about what works
- Struggling franchisees about challenges
18. What are your future growth and expansion plans?
Find out if the franchise has sustainable expansion strategies. Ask:
- Where they are planning to open new locations
- If they are investing in new technologies
19. How do you handle economic downturns and crises?
Ask how they supported franchisees during COVID-19, recessions, or industry shifts.
20. What is your long-term vision for the brand?
You want to invest in a franchise that is forward-thinking and stable.
Preparing for Franchise Success
Meeting a franchisor face to face is your chance to get the full picture before making a decision. Asking these 20 critical questions will help you determine whether the franchise:
- Has a strong financial foundation
- Provides excellent training and support
- Has a competitive edge in the market
- Offers a fair and transparent contract
At Paradigm Franchising, we help aspiring franchise owners navigate the research process and confidently evaluate opportunities. Whether you’re interested in a well-established national brand, a high-growth industry like fitness or home services, or a scalable service-based business, choosing the right franchise starts with thorough research and expert guidance.
Ready to find the perfect franchise opportunity? Get a free consultation where we match you with the best options personalized to your goals, budget, and experience. Don’t navigate this journey alone— contact us today and take the first step toward owning a thriving franchise!