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27 Tough Questions to Ask if You're Buying a Franchise Business

The Founder: He took someone else's idea and America ate it up.

• Background

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• How did this business get started?

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• When did you sell your 1st franchise?

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• What are your future growth plans? What are your income streams and profits?

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• Why should I invest in your franchise, and not another?

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• Leadership

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• What is the experience of your leadership team?

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• Who would my contact be as a franchisee?

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• Can I meet and talk with other franchisees?

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• How do you evaluate whether a potential franchisee is a good fit for this business?

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• How do you communicate with franchisees?

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• How do you resolve disputes with franchisees?

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• Financing and Legal

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• What is my investment cost to open?

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• After my start-up costs, how much operating money will I need to break even, and to make a profit?

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• How many franchise locations do you have? How many are profitable? How many fail each year?

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• What are my franchise fees and obligations: rent, utilities, monthly royalty, marketing costs, advertising fees, insurance, legal fees, etc?

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• What are my potential profits? What royalties do I pay? What's my revenue stream?

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• How is a location secured? Who holds the lease?

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• What is a franchisee's liability and obligations if the business or the franchisee is sued?

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• Training and Operations

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• How does training work: onsite, offsite?

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• What is your ongoing training and support?

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• Is there a written operations manual?

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• How does it work if I have an idea for growing the business? Am I allowed to innovate? Do I get a royalty if my concept is implemented system wide?

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• What steps are taken for quality control? How do you assure my franchise is not damaged by another franchisee's failures?

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• Marketing and Sales

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• How do you research and track consumer demands for this product? What is the business plan for my potential franchise?

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• Do I have exclusive franchisee rights to a specific geographic area?

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• Are you a member of any business organizations, such as Chamber of Commerce?

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• Exit Strategy

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• Do you have any plans to sell the business?

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• What are the requirements if I want to sell my franchise?

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• The Sales Assassin: Master Your Black Belt in Sales - My international bestselling sales book can teach you to be a Sales Assassin https://www.amazon.com/Sales-Assassin-Master-Your-Black/dp/0996269304

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