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Home > Questions to Ask Franchisors

Questions to Ask Franchisors

  • Where will your franchise be located?
  • What is the success rate of existing franchises?
  • What method is used to protect franchisees from poorly performing franchises?
  • Is there a franchise owners association?
  • Is there a franchise advisory council?
  • Who owns the trademarks, service marks, etc., and are they federally registered?
  • Are there any disputes pending or threatened against the trademark?
  • Has the franchisor complied with the FTC and state disclosure laws?
  • Are any senior management or key personnel leaving the system?
  • Does this company compete with the franchisees in the marketplace?
  • Will the franchisor finance any of the costs?
  • Is the franchisor willing to negotiate the terms of the franchise?
What is the total investment required to own a franchise? Expand
  • Franchise fee
  • Furniture, fixtures, and equipment
  • Leasehold improvements
  • Lease deposits
  • Other deposits
  • Franchise training
  • Travel expense
  • Supplies
  • Advertising and brochures
  • Grand-opening advertising
  • Inventory
  • Pre opening staff costs
  • Working capital until breakeven
  • Working capital - living expenses
  • Other
What are the continued financial costs, the basis used for calculation, method of payment and frequency of payment? Expand
  • Royalties
  • Advertising
Will the franchisor finance any of the costs? Expand
  • Does the franchisor earn income on purchases?
  • How much does the franchisor earn?
  • How are the products distributed?
  • How long does it take for the orders to be filled?
  • What other initial or continuing services does the franchisor provide? What do these costs?

Questions About Products and Services

  • Are there any new products or services under consideration for addition to the franchise?
  • When are they going to be introduced?
  • What is the estimated additional cost for adding the new products or services?
  • Are there any restrictions on the distribution or sale of the product?
  • Is there a guarantee or warranty program?
  • How is it administered and what is the cost?
  • Is there a minimum that must be purchased?

Questions About Operations

  • What are the roles and responsibilities of the field staff?
  • How many locations does each franchise consultant work?
  • What is the background of the franchise consultant I will be working with? Can I meet that person before purchasing the franchise?
  • How often does the field staff visit a franchisee's location?
  • What is the additional cost of field services if the franchisee requires it?
  • Exactly what kind of assistance is given?
  • What, if any, is the charge for assistance?
  • Does the franchisor provide hands-on assistance during the pre-opening, grand opening and initial period? Of what type, duration and cost?
  • What kind of business management systems are provided to boost sales and profits?

Questions About Advertising and Marketing

  • What type of consumer advertising does the company recommend?
  • What types of cooperative advertising programs are being used?
  • What percentage of sales is recommended or required for advertising or marketing?
  • How do the franchisees obtain their sales leads or customers?
  • What is the franchisor's national/regional advertising program and budget?
  • What portion of the national/regional advertising contribution is used for administrative/corporate/agency expenses and fees?
  • What are the primary advertising/marketing vehicles?
  • What is the grand opening advertising program and cost?

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Horsepower Brands is a portfolio company of franchise brands in the service industry delivering first in class customer service and experiences. More importantly the services we provide are needed by all consumers across North America.

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