5 Essential Questions to Ask Before Investing in Any Franchise

You've decided to explore franchise ownership. Congratulations! You're on the cusp of a life-changing journey that offers the freedom and control of entrepreneurship with the support and proven systems of an established brand.

But before you sign on the dotted line, it's crucial to thoroughly vet your options. As one of the biggest investments of your life, a franchise requires due diligence. That's why at Franchise Together, we always begin with a self-assessment to clarify what you're looking for in a franchise. Only then do we guide our candidates through the process of evaluating specific opportunities.

While the exact questions to ask will vary based on your unique circumstances, there are five key factors that every prospective franchisee should consider –

Question 1: Does this franchise fit my lifestyle?

Many of our candidates, especially those coming from corporate jobs, are seeking a different work-life balance. While any franchise will provide more autonomy than a traditional job, each opportunity will impact your lifestyle differently.

Consider the implications of a home-based vs. brick-and-mortar franchise. The former offers significant schedule flexibility but may blur work-life boundaries, while the latter may require consistent hours but create clearer separation. If you plan to be an owner-operator, also look at typical business hours. Some franchises, like medical transportation or fast food, may demand late-night or on-call availability.

Question 2: Will this franchise help me achieve my goals?

People pursue franchising for various reasons - flexible schedules, reduced work hours, financial independence, legacy building, career autonomy, skill development, community involvement, and more. Different franchises align with these goals differently.

For instance, if wealth-building is your top priority, a multi-unit franchise will accelerate your progress compared to a single-unit model. If you crave a stronger connection to your local community after working for a faceless corporation, a regional franchisor may be more fulfilling than a national brand. Clarity on your "why" is essential for choosing the right franchise.

Question 3: How much will I have to learn to be successful?

Every new venture involves a learning curve, even for seasoned franchise owners. Before evaluating opportunities, determine how much of a learning curve you're willing to take on. Are you up for a completely new challenge, or do you prefer something closely aligned with your prior experience?

Franchisees with limited business experience often face the steepest learning curves. But even seasoned executives may need significant training when entering a new industry. For example, if your background is in B2B services, a commercial cleaning franchise will have more commonalities than a fast-food or retail franchise. It's a matter of personal preference - just be honest with yourself about your appetite for learning.

Question 4: What's the competitive landscape?

When investigating a specific franchise, don't just focus on that company - examine the broader landscape. Is the industry crowded? If so, does the franchise have a clear, compelling, unique value proposition to stand out? Even if the overall market isn't saturated, consider the competition in your target geographic territory, including other franchisees from the same brand.

Assess the franchise's product-market fit as well. If it's lacking, competitors with a slightly different approach may easily outshine you. A high-end salon, for instance, may struggle in a mid-market area, especially near a discount haircut chain. Finally, evaluate the franchisor's marketing program. If it's weak, you'll need the expertise and budget to create your own, or risk being overshadowed by competitors with superior marketing.

Question 5: Do I feel good about the business system?

The proven business system is a key advantage of franchising over traditional entrepreneurship. A strong system means the franchisor has optimized product-market fit, operations, and more. But never assume a franchise's system is solid just because it's for sale.

Carefully review the Franchise Disclosure Document provided by each franchisor you're considering. Look for red flags as well as signs of health, such as a long operating history, consistent growth, and low franchisee turnover.

Final Thoughts

These five questions offer a valuable framework for evaluating any franchise opportunity. They'll help you look beyond the surface appeal to assess the critical factors that will shape your day-to-day experience and long-term success as a franchisee.

Remember, due diligence is your friend. By taking the time to thoroughly vet your options, you dramatically increase your chances of finding a franchise that aligns with your goals, suits your lifestyle, and sets you up for a fulfilling, prosperous future.

Mack and Sharon Strange are on a mission as Franchise Consultants to help others go from “Start” to “Success” when it comes to franchise ownership.

If you’re curious about exploring franchising as a career pivot, investment vehicle or lucrative side hustle, let’s talk!

Frequently asked questions (FAQs)

Q: How do I book a call?

A: You can book a free, no obligation call with Mack here and/or a free call with Sharon here.

Q: How much do your services cost? 

A: As Franchise Consultants, there’s no fee for our services. We’re compensated by franchisors only if and when you decide to move forward with (and are approved for) franchise ownership.

Q: What do you do? 

A:  Our role is to serve as a trusted guide and educational resource.

Q: Where can I learn more? 

A: You can learn more about our story and how YOU can follow in our footsteps via the Franchise Together Podcast.

We look forward to connecting with you soon!