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Franchisee Advice

4 Key Questions for Prospective Franchisees

What to ask when you’re researching a franchise opportunity – and how to get the answers.

Jeff Elgin




Sometimes knowing which rocks to look under is the secret to discovering what you’re looking for. Though there are many topics to explore when researching franchise opportunities, years of experience have shown that if you want to make sure a franchise is a good one, you need to ask four key questions:

1. How well does the franchisor prepare new franchisees to succeed?

This is a broad question but it is also the most important one of all. When you acquire a franchise, what you’re supposed to receive is a proven system for producing predictable results. The bargain you make is that the franchisor will teach you everything you need to do in order to succeed and you’ll follow its direction.

In order to evaluate how well a company prepares new franchisees, you’ll need to do three things.

  1. First, evaluate its training programmes to make sure that all functional areas of the business are completely covered and that systems are in place to assist you as you learn how to operate the business.
  2. Second, evaluate its initial unit opening support systems to ensure that you will have all the assistance you need with every facet of opening a new outlet. That means site selection, lease negotiation, financing, construction, supplies and inventory, and finding and training employees.
  3. The third area you’ll need to evaluate is the franchise’s front line support staff. You should make sure that these people know everything about the operation of a new unit and that they will be there for you when you need help. As the saying goes, in a good franchise you’re in business for yourself but not by yourself, so make sure this is the case.

2. How strong is the ongoing support?

After you get your first unit up and operating, you’re still going to need plenty of assistance to deal with the issues and problems that every business owner faces. So you need to know how well the franchisor is set up to provide ongoing support, assistance and training to help you deal with the challenges you’ll face.

You should also evaluate the franchisor’s ongoing efforts to make its franchisees more successful by maximising their collective purchasing power. Successful programmes can provide savings on supplies and inventory that offset most or all of the ongoing royalty fees a franchisee is required to pay the company, so this is a key factor to consider.

3. How good is the marketing programme?

In order to succeed, you need to attract enough customers to support your franchise. A good franchise opportunity will provide support to both initial and ongoing marketing programmes in order to produce those customers.

The initial marketing programme needs to drive enough trial customers into your business to solidify your primary customer base. Make sure you confirm that the company has specific strategies and tactics to accomplish this and that its programme works consistently in various markets around the country. Ongoing marketing programmes need to drive enough new customers to the business to offset attrition and meet growth goals. Check that the franchise has strong and consistent year after year same-store sales growth and that this result is accomplished by increasing customer numbers and not simply via price increases.

4. How much money can you make?

Many people looking at franchise opportunities naturally consider this to be the most important question, and there are two good potential sources of information to answer it. First, many of the best companies publish their earnings information in their Franchise Disclosure Documents. If they do, this will save you quite a bit of time in finding an initial answer to this question.

Whether the franchise you’re researching publishes this data or not, you still need to verify the information through the second source: calls to existing franchisees. You need to determine how much money a mature unit makes after operating for a few years.

You also need to know how the first year or two looks financially – when units typically reach the break-even point – and how much money franchisees need to subsidise their operations before they reach that point.

Be sure to compare the income expectations to the total investment size to confirm that the return appears to be reasonable. Finally, analyse how many of the existing franchisees own multiple units as a way of increasing their total earnings from the business.

The process you should go through in answering all of these questions is threefold. First, get the official answer to the question from the franchise company. Second, talk with multiple existing franchisees to validate, confirm and perhaps expand on the official answers. Finally, go back to the franchisor to clarify any conflicting information you have received so that you are confident that you have determined the correct answers.

Consolidating your answers

When you have the answers to these four questions, you’ll know if you have found a good franchise opportunity. If any of these four areas are weak, you should pass and find a different franchise.

Once you find a company that meets your expectations in these critical areas, make sure you match up well with the people involved. You should like them and feel comfortable about working with them. If you become a new franchisee, you’ll be in a very close relationship with these folks for years, so you need to be sure that everyone is on the same wave-length in terms of values and goals.

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1 Comment

1 Comment

  1. Trevor Wyborn

    Oct 13, 2011 at 09:03

    Here is a question I put to potential franchise buyers, Ask them to go and work for free in any franchise outlet, not the training store, to learn the ropes as a shadow to the owner. Marketing talk is often the exact opposite of reality.

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Franchisee Advice

What To Know About Franchising Your Business

For many businesses, franchising is an excellent route to growth, opening up new opportunities and markets. Laurette Pienaar, National Franchise Manager at Nedbank, unpacks why it’s worth considering this route.

Nadine Todd




Vital Stats

  • Player: Laurette Pienaar
  • Position: National Franchise Manager
  • Company: Nedbank Limited
  • Visit:

What type of business is ideally suited to the franchise model?

Franchising has been proven successful across all industries, including the automotive, food, entertainment and retail industries. However, several key qualities ultimately determine a concept’s ability to successfully become a franchise.

Firstly, the business model must be scalable and able to be repeated in several locations. Secondly, there must be demand for the products sold and, thirdly, the franchise model must be proven as profitable.

Related: (Infographic) 7 Digital Marketing Strategies For Franchises

Why is franchising a good growth option?

Franchising is often used as a cost-effective growth strategy for businesses. A key benefit of this strategy is that no capital layout is required for a new franchised store as opposed to corporate-owned stores.

Franchised stores are also proven to be more successful than corporate-owned stores. This is mainly due to the fact that the franchise owners have a vested interest in the store, whereas corporate stores are supervised by a manager. Franchising is therefore also a great way to build your brand.

What should business owners focus on?

Franchisors should set up good infrastructure to support their franchisees, including good upfront and ongoing training to both the franchisees and their staff, the correct legal advice and assistance, and a strong operational team to assist franchisees daily.

Many successful franchisors provide support by expanding through vertical integration, which provides franchisees with logistics, supply chain security and product consistency.

Several franchisors advocate a structure with both franchisee and corporate-owned stores. This enables a franchisor to keep in touch with the daily challenges franchisees experience and new products and solutions can be tested at a corporate store before being rolled out to the franchise network.

How can franchising consultants assist business owners?

Franchise consultants provide daily operational support to franchisees. They are responsible for daily store visits to assist with quality checks, process flows, supplier relationships and, often, financial assessments. They are a helpful soundboard on any improvements to be made in the business model and can convey suggestions to the franchisor.

Related: The Secret Sauce To Great Franchise Leadership

What challenges should business owners be aware of?

Businesses looking to franchise need to ensure that their business is teachable to others. Overcomplicated products and systems may deter franchisees from investing in your brand.

Franchisors have to do ongoing introspection regarding their company culture. For example, does the culture promote innovation and inspire franchisees and consumers, which ultimately is a culture worth investing in?

New franchisors’ selection criteria for franchisees are often not sufficiently thorough and comprehensive. For a new franchisor, it is important to choose good quality franchisees and to have strict selection criteria to ensure that your brand remains reputable and stable during fast-expanding cycles.

What lessons can be learnt from SA’s successful franchises?

Businesses looking to expand through franchising should consider setting up several corporate-owned stores first. This assures potential investors that your business is based on a proven model with a track record and supportive infrastructure.

There is not always a one-size-fits-all model. Many franchisors have created custom models to accommodate and adjust to the need of a specific property or consumer market. A great example of this would be the food industry where many franchisors offer shopping centre concepts, drive thrus and kiosk or express concepts. Consider this when developing your model.

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Franchisee Advice

Develop Digital Marketing Competency In 3 Simple Steps

Conquering the digital revolution needn’t be daunting. Polish up your tech skills and watch your digital marketing prowess increase throughout your franchise.

Diana Albertyn




As a franchisor, digital marketing may be proving to be a challenge due to the unique structuring of the business.

“The very nature of franchises is ‘structured’, however, when it comes to marketing, that structure often lacks,” says Marcela De Vivo, Founder and CEO of Gryffin Media.

Franchisors and franchisees often struggle to reach common ground when looking to achieve different marketing goals. While the franchisor needs to control the brand in its entirety, the franchisee wants to market their business using particular strategies suited to their location.

Research has found that smartphones are the biggest influencers of 82% of users when they make their in-store purchase decisions while. It’s for this reason that the importance of digital marketing for franchises has increased.

Here’s how to harness its power of influence, amplify foot traffic and solidify brand loyalty:

1. Recruit digital natives and early adopters

As much as you’re the leader of your franchise network, there are franchisees in your chain you could learn from. The global increase in millennial franchise owners means it is highly likely that you’ll be able to identify early digital adopters within your franchise network.

“The best people to learn from are those who have been in your shoes before,” says Matt Forman of the Franchise Centre at Griffith University.

“Encourage and support their efforts and use them as case studies to demonstrate to the rest of your franchisees the value of digital marketing, and how to do it right.”

2. Invest in training your team

“Each digital competency level requires more education and resources in order to integrate digital marketing with your physical stores,” says Forman. For this reason, regularly investing in continuous training for your team so as to ensure they keep abreast of any new and emerging trends.

Proactivity and adapting to the constantly evolving digital landscape led KFC to open a LinkedIn account for its founder and mascot Colonel Sanders. KFC’s out of the box tactic is a fresh approach to what has long been considered a B2B platform, under-utilised as a B2C platform.

3. Apply custom targeting techniques

The discovery of new and small businesses is being fuelled by Google searches, social media and online reviews, making these platforms a goldmine of invaluable tools.

Leveraging certain custom targeting techniques like easily searchable keywords and exposure on other reputable and high-traffic websites, gives your franchise’s digital marketing efforts a boost. This results in an effective campaign, favourable reviews and meaningful and lasting interactions with consumers “whether it’s a reply to a Facebook comment or a retweet,” says Entrepreneur’s Emily Conklin.

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Franchisee Advice

How To Hire Skilled Workers For Your Franchise

Your staff run your business – you just have to show them how. This is why employing the best people for the job is essential.

Diana Albertyn




According to the Franchise Association of South Africa (FASA) 2017 Franchisor Survey, one of the main challenges facing franchisees is finding the right staff.

“Staffing your franchise can be one of the most challenging parts of running a successful business. Without a great team of employees, you cannot run your business effectively,” says Saxon Marsden-Huggins, founder of WebRover.

These three tips could help you find the best employees for your franchise outlet:

1. Don’t hire in haste

While you may be rearing to go and keen to fill gaps to speed up profitability, research your candidates thoroughly.

Related: Insights On Recruitment That Could Affect Franchise Performance

As the job applications keep flowing into your inbox, keep in mind that not all of them qualify for the positions available – it may even be a small percent who are actually viable candidates. This is why your hiring process should include:

  • Taking the time to thoroughly screen CVs to develop a short list
  • Creating a carefully crafted list of interview questions
  • Setting aside adequate time for thorough interviews
  • Getting to know the candidates through a second round of interviews to confirm your choice.

Giving the hiring process dedication and attention will ensure you get the cream of the crop, contributing to the long-term success of your franchise.

2. Demonstrate support in the workplace

While you can instil the necessary skills into new recruits, it’s difficult to train for culture. This is why choosing the right employees from the beginning will make the rest of your franchise management system will run more smoothly.

“The manner by which you run the franchise will influence employee perceptions of the brand as well,” says Hireology’s Erin Borgerson. “Your staff must become ambassadors of your franchise system to attract the target consumer market.”

The best way to do this is encouraging staff to give you their honest feedback. Your commitment to creating and upholding a positive culture will result in increased loyalty from your current staff and a superior pool of applicants.

Related: 3 Things You Should Consider Before Buying Your First Franchise

3. Offer appealing incentives

When advancement opportunities are clearly communicated, staff is keen to hear how they can get there, as they have career goals of their own. Encouraging this ambition will draw good employees to your franchise.

“Helping employees understand the steps to advancement helps them to view their current job as an important part of a career with an upward path, not just a pay cheque for this week,” say financial reporting technology experts at Qvinci.

Performance bonuses and employee benefits incentivise staff’s efforts, therefore increasing their income alongside the profit of the business. “This serves to make employees a part of the business and not merely people ‘who work there’,” they explain.

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