Questions You Should Ask to Help You Vet a Franchise

When choosing the right franchise to join, that franchisor will interview you to see if you’re a good fit for the business. However, this is not just a one-way street. You also should be doing your own interview to see if this business is also a good fit for you. The last thing you want as an aspiring entrepreneur is to get involved with a franchise and find out later that you are not compatible with that business. 

While joining a franchise is a bit easier than starting your own business from scratch, it will still take a significant amount of work on your part. You will still be required to perform your due diligence. Even if you choose to work with a franchise broker, you should still vet the franchises presented to you to ensure you will be mutually beneficial for each other.

Advantages to Joining a Franchise

The most obvious advantage to joining a franchise is that you get the benefit of established brand recognition. Unless you’re joining a brand new franchise, the company that you’re joining as a franchisee will have already established their brand in people’s minds. If you do join a brand new franchise, that company is going to be working extra hard to establish their brand identity, which means you still get to take advantage of their branding efforts.

Another advantage is that the franchise will have an operating system in place that is already proven to work. Any reputable franchise will have honed its franchising process so it runs like the proverbial well-oiled machine. That means you will receive the training you need to run your business as if you’ve been handed the “owner’s manual” for it. 

Many franchises take care of admin services for their franchisees, like running a call centre to book appointments, marketing and promotion, running a website, social media and more. They can also help their franchisees negotiate leasing agreements, find vendors for supplies or even help with financing. This means you don’t have to worry about doing these things, because the franchise either does them for you or helps you with them.

Lastly, good franchisors know the only way they are successful is if their franchisees are successful. This means franchisors will share their market research and other vital information with you. They also often provide ongoing training beyond the initial educational sessions and usually provide mentoring services with more established franchisors in their system or regional representatives.

Where to Start

When joining a franchise in Canada, the first stops you should make are the Canadian Franchise Association (CFA) and the FranNet websites. The CFA advocates for the entire franchise community in this country from franchisors to franchisees to service providers like brokers.

As part of its advocacy for franchisees, the CFA recommends all potential franchisees go through a thorough process of assessment for not only the franchises they are considering joining but for themselves, as well.

Ask yourself what your motivation is for wanting to join a franchise and what you can contribute to the franchise, drawing on your work experience. Read as much you can about the entire process and the specific franchises you’re considering so you completely understand what it is you’re getting into.

Questions the CFA recommends you ask of a franchisor during your vetting process include:

  • Is the franchisor a member of the Canadian Franchise Association? (You can also check to see if they are associated with FranNet, as we only work with reputable franchises.)
  • How many years has the franchisor been operating?
  • How many franchisees does the franchisor have?
  • Can the franchisor provide a list of all franchisees along with their contact information so you can talk to some of them about their experience?
  • How does the franchisor choose its franchisees?
  • How much is the initial franchise fee?
  • What are the franchisor’s plans for future development?
  • What is the competition for the product?
  • What kind of support does the franchisor provide to franchisees?
  • Will you be provided with a disclosure document? Does it comply with provincial laws or CFA’s minimum disclosure requirements?
  • (For military veterans) What incentives does the franchisor have for military veterans?

Choosing a franchise to join is a long and sometimes arduous process that involves getting to know and building trust between one another. If you perform your due diligence, you should feel completely comfortable with the decision you’ve made and you should put yourself in a position to succeed with your chosen franchise. To find the perfect franchise opportunity for you, fill out the free FranNet Franchise Search Consultation Form.

Jun 15, 2017