Questions to Ask to Make an Informed Decision
Jack Armstrong
Senior Franchise Consultant helping clients purchase the right franchise or existing business
Before signing a franchise agreement, it's crucial to ask yourself a series of questions to ensure you're making an informed decision and entering a franchise arrangement that aligns with your goals, capabilities, and expectations. Here are essential questions to consider:
Understanding the Business Model?
1. Do I Understand the Business Model? Assess whether you fully grasp the franchisor's business model and if you can see yourself operating within its framework. It's important that the business aligns with your interests and strengths.
2. Have I Conducted Thorough Research? Confirm that you've conducted in-depth research on the franchise, including reading the Franchise Disclosure Document (FDD), understanding the financial aspects, and speaking with existing franchisees about their experiences.
Support and Obligations
3. Am I Financially Prepared? Evaluate your financial readiness, including the initial investment, ongoing fees, and personal financial cushion to support you during the business's early stages until it becomes profitable.
4. Does the Franchisor Offer Adequate Support? Consider the extent and quality of the training, support, and resources the franchisor provides to ensure franchisee success, including marketing, operational support, and ongoing training.
5. What Are My Legal Obligations? Understand your legal obligations under the franchise agreement, including term length, renewal conditions, termination clauses, and any restrictions on selling your franchise.
Return on Investment
6. What Are My Expectations for Return on Investment (ROI)? Reflect on your financial goals and whether the franchise offers a realistic path to achieving them based on the financial performance of existing units.
7. What's My Exit Strategy? Consider your long-term plans and whether the franchise agreement offers a feasible exit strategy should you decide to sell or leave the franchise.
Asking yourself these questions and seeking clarity on each point can help ensure you're making a well-informed decision that aligns with your personal and financial goals before committing to a franchise agreement.
I can help you figure out what is the best fit for you. I have been doing this for twenty-nine years and have helped hundreds of people find success. Give me a call, email, or text. I would love to chat with you.