by anthonycaliendo
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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

• How did this business get started?

• When did you sell your 1st franchise?

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

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

• Leadership

• What is the experience of your leadership team?

• Who would my contact be as a franchisee?

• Can I meet and talk with other franchisees?

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

• How do you communicate with franchisees?

• How do you resolve disputes with franchisees?

• Financing and Legal

• What is my investment cost to open?

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

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

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

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

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

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

• Training and Operations

• How does training work: onsite, offsite?

• What is your ongoing training and support?

• Is there a written operations manual?

• 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?

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

• Marketing and Sales

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

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

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

• Exit Strategy

• Do you have any plans to sell the business?

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

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This checklist was created by anthonycaliendo

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