Franchise Questions: 10 Crucial Questions to Ask a Franchisor
Investors interested in franchising should cast a broad net, research several opportunities, and narrow down the decision until they find the best possible franchise that meets their entrepreneurial interests and financial needs.
Knowing what franchise questions to ask can help you pinpoint the best opportunity. Here are 10 questions to help you get started.
What Type of Training Does the Franchise Offer?
For example, Tide Cleaners franchisees need no background in laundry services to lead a successful franchise because Tide Cleaners offers all the support and training needed to learn the business. Before their grand opening, franchisees undergo approximately two weeks of hands-on education at a training facility in operating a Tide Cleaners, plus one week of self-directed computer-based training. There are also regional support representatives to guide franchisees and provide ongoing support.
Does the Franchise Use Uniform Systems and Software
The consumer experience at any franchise location across the nation should be recognizable and familiar. That requires uniform systems, software, and management practices at each location. Ask franchisors what they do to create a uniform brand experience.
To maintain brand consistency, Tide Cleaners assists franchisees with store design, equipment purchases, employee training, and software training.
Will the Franchisor Help With Site Selection?
Ask the franchisor if they help you find the right location to drive customer traffic and whether they help negotiate the lease.
Tide Cleaners offers tools and support to aid franchisees with site selection based on our extensive experience supporting franchise owners.
How Much is the Overall Investment?
Most reputable franchises will have this information publicly posted on their website, so investors can easily learn whether ownership is within financial reach.
Does the Franchisor Offer Incentives?
Incentives are not required, but it’s worth asking what is offered. Incentives can be limited time or situational and can include things like deferred fees or an initial marketing expenditure to drive traffic to a new store.
What Area Will My Store’s Territory Cover?
It’s important to understand the area your store covers. In most cases, franchisors create a specified radius around your store in miles, where they guarantee not to sell a store to another franchisee to limit competition in your designated territory. This radius can vary in miles depending on the population in your community and other market factors.
What Proof of Success Can the Franchisor Provide?
What is the Term of the Franchise Agreement?
It’s important for investors to understand how many years they’re committed to the franchise.
The franchise agreement at Tide Cleaners is an initial term of 10 years, plus a 10-year renewal option.
What Are the Ongoing Franchise Fees?
Before signing on the dotted line, get a clear understanding of the fees associated with using the brand’s name, trademark, systems, and other benefits. Most franchisors list these fees publicly on their website, and the fees can vary among franchise brands.
Tide Cleaners franchisees pay a continuing royalty fee of 6.5 percent of net sales, and the fee is paid weekly via electronic funds transfer. There is also a 4 percent advertising fee for Tide Cleaners franchises that is also paid weekly.
Can I Open Multiple Locations?
If you have the funding, experience, and ambition to afford more than one store, talk to your franchisor about multi-unit development opportunities.
Tide Cleaners encourages qualified investors to open multiple locations.