Ten Questions Every Franchisor Should Ask Before Granting a Franchise
by Ed Teixeira
Before granting a franchise most franchisors have a process they follow that
begins with qualifying a candidate to ultimately granting a franchise. However,
there are certain questions that ought to be mandatory for all franchise
Franchisors that operate a successful franchise system will most likely have a
structured franchising process that begins at the initial franchise inquiry and
ends with the execution of the franchise agreement. However, franchisors should
consider ways to improve the process and that includes being able to better
predict how successful a particular franchise candidate will be. Candidate
testing, screening programs and franchisor staff reviews will increase the
predictability of future franchisee performance. In addition to these steps here
are ten questions that ought to be asked before the franchise transaction is
completed. The responses to these questions may provide a different perspective
regarding your future franchisee.
- When do you expect to reach breakeven?
- What do expect your sales will be in six months after
opening? After one year?
- In the event you need to invest more capital in the
franchise how much could you invest and where will it come from?
- What are skills do you have that you believe will make you a
- Will anyone assist you in operating the franchise? What are
- Do you desire to own more franchises?
- Have you considered an exit plan say 5 or 10 years down the
- If some unforeseen event occurred that would prevent you
from operating the franchise who would you depend upon to
- Have you developed a work schedule you’ll follow when you
operate the franchise?
- What are major concerns you might have about being
successful? Have you considered anything that could go wrong?
The way a prospective franchisee responds to these questions can provide an
indication of how the franchisee might perform. When asking these questions play
close attention to the response.
© 2011 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He
can be reached at email@example.com