3 Essential Questions to Ask Your Franchisor

Posted on Sep 12 2018 - 1:00am by Expert-Zine

businessman handing the franchise contractWhen thinking of investing in one of the green energy franchise opportunities around you, it’s essential to collect as much information as possible before making a decision. Buying the wrong franchise can lead to years of regret, not to mention the loss of your hard-earned money.

To understand whether a franchise is a perfect fit for you, ask the franchisor these three questions.

Do you provide financing assistance?

You most likely have some money saved up for the business. However, this money may not be adequate. Some franchisers help franchisees to obtain financing. Ask your franchisor whether they can do the same for you. Usually, a franchiser will have a list of preferred vendors they can recommend to you.

Ask where their current franchisees obtained capital from the start and grow their businesses.

What financial incentives do you provide?

Most franchisors provide financial incentives to women, veterans, and minorities. These incentives come in the form of a reduced franchise fee or lower royalties. If you belong to one of these groups, don’t shy away from asking what incentives, if any, you can expect.

If you are thinking of opening a business in an area that the franchise doesn’t have a presence, you may also be given a financial incentive.

What is the exit strategy?

Every smart entrepreneur starts with the end in mind. You aren’t planning to be a franchisee forever, are you? Determine where you want to be in the next 10 or 20 years, assuming you meet with great success in your franchise. Do you plan to establish your own company?

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If so, then you may wish to sell your franchise to someone else or back to the franchisor. Ask them before buying whether they will allow and support your decision.

Buying a franchise is an important business move that should be approached carefully. To make sure you are making the right decision, it’s important to ask the right questions while interviewing the franchisor.