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The Questions You Need To Ask Yourself Before Signing The Franchise Agreement

Posted: 12 May 2018
Estimated Read Time: in about 15 minutes

These are the questions you need to ask to check the quality of support a franchisor offers, Linda Whitney says

The Questions You Need To Ask Yourself Before Signing The Franchise Agreement

What kind of support do you get from franchisors when investing in a franchise? It pays to ask.

Typically, franchise brochures and websites list the support they offer in a series of brief sentences - but you need more detailed information than this. Study the list and make a list of your own questions for the franchisor and its franchisees.

Questions for franchisors

What support do you offer - in detail? Is it the same for all franchisees or can it be customised to suit my existing skills and needs?

What combination of initial and long-term support do you offer?

Sara Jeffery, franchise recruitment manager at Signs Express, says: “We offer potential recruits the chance to meet our team at discovery days and invite them to ask as many questions as they like.

“We think asking a lot of questions shows you have a good head for business.”

What support will I get in launching my business?

Berkeley Harris, now a Sandler Training franchisee, but formerly franchisor with the WPA health care franchise, says: “This varies widely. Some franchises devote a lot of work to franchisees before launch, but then leave them to get started, while others send a franchise manager to work with you for the first few weeks.

“Some even supply you with initial business.”

What marketing support do you offer and how much do I pay for it?

Often, franchises charge a monthly fee for marketing support. “Ask how much you pay and what you get - nationwide advertising, marketing, social media activity and PR can be hard to quantify for individual franchisees,” Berkeley says.

Is part of the budget allocated to each franchisee for local marketing or can you call on that fund for your own marketing activities? In some cases, it may be cheaper to do it yourself.

“Ask the franchisor about this and ask their franchisees if they think it’s value for money,” Berkeley says.

What kind of problems most commonly crop up for your franchisees?

Are they arising because of a lack of support for franchisees in the early days? Check what support the franchisor offers to help franchisees tackle these problems.

Can you give some practical examples of how your support has helped franchisees? It may be possible to check the answer by speaking to franchisees themselves.
How has the franchise performed in awards designed to celebrate quality franchisee support?

Chris Cook, director of franchise marketing, recruitment and development consultancy Chantry - and a franchisee himself - says: “Research the franchise’s performance in awards such as the Best Franchise Awards run by Smith+Henderson, which are based on surveys of franchisees and take into account their views about training and support.”

The British Franchise Association also gives franchisee support awards, as does the website workingmums. co.uk.

Can I speak to existing franchisees about the level of support they get? And can I choose which ones I speak to? Ask franchisors to tell you something about their franchisees and their backgrounds.

“Select a variety of different franchisees to speak to, including those with similar backgrounds to yours, as well as some who have performed well and those who have not made so much progress,” Chris advises.

When it comes to support, the latter may have needed more than the former, so you may well learn more from them.

 

Questions to ask existing franchisees

Are you getting value for money when it comes to franchisee support?

Monthly fees paid by franchisees to franchisors typically include contributions towards the cost of franchisee support, so does the franchisee think it’s money well spent?

Chris says: “The franchisee support offered by some franchisors certainly falls short of their claims, but in other cases existing franchisees complain about the quality of support they get, when in fact the franchisor is providing it, but the franchisee is not recognising it or has forgotten it.

“If you come across a franchisee who complains, ask some of the others what they think of the support the franchisor provides - you may get a different story.”

Has the level and nature of support changed over time?

Chris says: “If you ask this of a long established franchisee and one who has been recruited more recently, you may get clues about how the level of support is changing and you will see if the franchise is keeping up to date in providing technical support systems.”

How involved in your support is the person who recruited you?

Chris says: “If a member of the franchisee recruitment team regularly contacts franchisees they have recruited to see how they’re progressing, it shows commitment to franchisee support.

“In some franchises, recruiters are incentivised by the performance of the franchisees they have recruited.” Whatever you do, ensure you have some questions to ask.

Sara says: “I’d always have my doubts about someone who says they have no questions about support at all. We look for business minded franchisees and asking questions demonstrates that.”

 

Asking questions the right way

Before asking any questions, think about how you ask them. It can make the difference between you being accepted as a franchisee or declined.

Berkeley Harris, now a Sandler Training franchisee, but formerly franchisor with the WPA health care franchise, says: “The tone you use in asking questions is important.

“If you use the ‘critical parent’ tone, it will inevitably prompt a ‘rebellious child’ reaction in the franchisor and turn them against you.”

In practice, he says, if you go armed with a list of questions and say: “I need you to ensure I am successful - what are you going to do about that?” the franchisor may feel challenged.

What’s needed is an adult-to-adult approach, so you might ask: “I can see you offer a lot of initial support, but what will it be like in 12 months?”

This sounds less challenging and will prompt a more positive response.

Berkeley says: “As a franchisor, I faced potential franchisees who adopted that challenging tone and was immediately turned off by them, until I realised what was happening.”

So make a list, but communicate your questions wisely.

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