Connect with us

Researching a Franchise

100 Questions to Answer Before You Buy a Franchise

Carefully consider these questions for yourself, other franchisees and the franchisor before investing in your own franchise opportunity.

Entrepreneur

Published

on

Businessman looking at question marks

Personal & Business Considerations

Financial Considerations

01. Have you and your spouse and family members discussed the idea of buying a franchise?

02. As a family, are you in complete agreement?

03. Do you have the financial resources required to buy a franchise? If not, where will you get the capital?

04. Are you and your family ready to make the necessary sacrifices in the way of time and money in order to operate a franchise?

05. Will the possible loss of company benefits, including retirement plans, be outweighed by the potential monetary and self-pride rewards that would come from owning a franchise?

06. Have you made a thorough written balance sheet of your assets and liabilities, as well as liquid cash resources?

07. Will your savings provide you with a cushion for at least one year after you have paid for the franchise, allowing a one year period of time to break even?

08. Do you have additional sources of financing, including friends or relatives who might be able to loan you money in the event that your initial financing proves inadequate?

09. Do you realise that most new businesses, including franchises, generally do not break even for at least one year after opening?

10. Will one of you remain employed at your current occupation while the franchise is in its initial, pre-profit stage?

Personal Considerations

11. Are you and your spouse physically able to handle the emotional and physical strain involved in operating a franchise, caused by long hours and tedious administrative chores?

12. Will your family members, particularly small children, suffer from your absence for several years while you build up your business?

13. Are you prepared to give up some independence of action in exchange for the advantages the franchise offers you?

14. Have you really examined the type of franchise or business you desire and truthfully concluded that you would enjoy running it for several years or until retirement?

15. Have you and your spouse had recent physical examinations?

16. Is the present state of your health and that of your spouse good?

17. Do you and your spouse enjoy working with others?

18. Do you have the ability and experience to work smoothly and profitability with your franchisor, your employees and your customers?

19. Have you asked your friends and relatives for their candid opinions about your emotional, mental and physical suitability for running your own businesses?

20. Do you have a capable, willing heir to take over the business if you were to become disabled?

21. If the franchise is not near your present home, do you realise that it would not be beneficial to sell your home and buy one closer until the new venture is successful?

Other Considerations

22. Do you know an experienced, business-oriented franchise attorney who can evaluate the franchise contract you are considering?

23. Do you know an experienced, business-minded accountant?

24. Have you prepared a business plan for the franchise of your choice?

Business Considerations

25. Do you and your spouse have past experience in business that will qualify you for the particular type of franchise you desire?

26. Is it possible for either you or your spouse to become employed in the type of business you seek to buy before any purchase?

27. Have you conducted independent research on the industry you are contemplating entering?

28. If you have made your choice of franchises, have you researched the background and experience of your prospective franchisor?

29. Have you determined whether the product or service you propose to sell has a market in your prospective territory at the prices you will have to charge?

30. What will the market for your product or service be like five years from now?

31. What competition exists in your prospective territory already?

32. From franchise businesses?

33. From non-franchise businesses?

Checklist For Interviewing Existing Franchisees

Use this questionnaire when trying to investigate franchise opportunities by interviewing existing franchisees.

Financial Factors

34. Are you satisfied with the franchisor?

35. Is your franchise profitable?

36. Have you made the profit you expected to make?

37. Are your actual costs those stated in the offering circular?

38. Is the product or service you sell of good quality?

39. Is delivery of goods from the franchisor adequate?

40. How long did it take to break even?

41.Was the training provided to you by the franchisor adequate?

42. What is your assessment of the training provided?

43. Is your franchisor fair and easy to work with?

44. Does your franchisor listen to your concerns?

45. Have you had any disputes with your franchisor? If so, please specify.

46. If you have had any disputes, were you able to settle them?

47. How was your settlement accomplished?

48. Do you know of any trouble the franchisor has had with other franchisees? If so, what was the nature of the problem?

49. Do you know of any trouble the franchisor has had with the government?

50. Do you know of any trouble the franchisor has had with local authorities?

51. Do you know of any trouble the franchisor has had with competitors?

52. Are you satisfied with the marketing and promotional assistance the franchisor has provided?

53. Have the operations manuals provided by the franchisor helped you?

54. What do you think of the manuals?

55. Are the manuals changed frequently? If so, why?

56. Other comments you would like to make.

Checklist Of Information To Secure From A Franchisor

Use this checklist when doing your own investigation and information gathering.

57. Is the franchisor a one-person company?

58. Is the franchisor a corporation with an experienced management that is well trained?

59. Does the franchisor operate a business of the type being franchised?

60. Is the franchisor involved in other business activities?

61. Is the franchisor offering you an exclusive territory for the length of the franchise?

62. Can the franchisor sell a second or third franchise in your market area?

63. Do you have the right of first refusal to adjacent areas?

64. Will the franchisor sublet space to you?

65. Will s/he assist you in finding a location for franchise operation?

66. Must you lease fixtures, signs or equipment from the franchise?
If so, are the prices reasonable?

67. Does the franchisor provide financing? If so, what are the terms?

68. Does the franchisor require any fees – other than those described in the disclosure document – from the franchisee? If so, what are they?

69. Has the franchisor given you information regarding actual, average or forecasted sales?

70. Has the franchisor given you information regarding actual, average or forecasted profits?

71. Has the franchisor given you information regarding actual, average or forecasted earnings?

72. What information have you received?

73. Will the franchisor provide you with the success rates of existing franchisees?

74. Will the franchisor provide you with their names and locations?

75. Are there any restrictions on what items you may sell? If so, what
are they?

76. Does your prospective franchisor allow variances in the contracts of some of his/her other franchisees? What is the nature of the variances?

77. In the event you sell your franchise back to your franchisor under the right of first refusal, will you be compensated for the goodwill you have built into the business?

78. Does the franchisor have any registered trademarks, service marks, trade names, logotypes and/or symbols?

79. Are you, as a franchisee, entitled to use them without reservation?

80. Are there restrictions, exceptions or conditions? If so, what are they?

81. Does the franchisor have existing patents and copyrights on equipment you will use or items you will sell?

82. Does the franchisor have endorsement agreement with any public figures for advertising purposes? If so, what are the terms?

83. Has the franchisor investigated you carefully enough to assure himself/herself that you can successfully operate the franchise at a profit both to him/her and to you?

84. Has the franchisor complied with FTC and state disclosure laws? Are there any regulations specific to the industry in which your franchise business will operate? (Include any special licenses or legal restriction on operations set by statutes.)

85. Does the franchisor have a reputation for honesty and fair dealing among the local firms holding his/her franchises?

Other Important Questions

86. How many years has the firm offering you a franchise been in operation?

87. What is a description of the franchise area offered to you?

88. What is the total investment the franchisor requires from the franchisee?

89. How does the franchisor use the initial franchise fees?

90. What is the extent of the training the franchisor will provide for you?

91. What are your obligations for purchasing or leasing goods or services from the franchisor or other designated sources?

92. What are your obligations in relation to purchasing or leasing goods or services in accordance with the franchisor’s specifications?

93. What are the terms of your agreement regarding termination, modification and renewal conditions of the franchise agreement?

94. Under what circumstances can you terminate the franchise agreement?

95. If you decide to cancel the franchise agreement, what will it cost you?

96. What are the background experience and achievement records of key personnel (their “track records”)?

97. How successful is the franchise operation? (Use credit reports or magazine articles to supplement information the franchisor gives you – visit www.kredit.co.za)

98. What is the franchisor’s experience in relation to past litigation or prior bankruptcies?

99. What is the quality of the financial statements the franchisor provides you?

100. Exactly what can the franchisor do for you that you cannot do for yourself?

Entrepreneur Magazine is South Africa's top read business publication with the highest readership per month according to AMPS. The title has won seven major publishing excellence awards since it's launch in 2006. Entrepreneur Magazine is the "how-to" handbook for growing companies. Find us on Google+ here.

Company Posts

Smoothie Franchise Opportunity: Puré Frooty Is A One-Of-A-Kind Smoothie Franchise Business

Looking for the next greatest franchise opportunity? Puré Frooty Smoothie is a highly perfected Australian business model launching in the South African market that doesn’t require extensive shop fitting or a large workforce.

Pure Frooty Smoothie

Published

on

saying-no

Vital Stats

Puré Frooty Smoothie is a unique business model to the South African market. A delicious, fruit filled smoothie will be created at the touch of a few buttons.

An Innovative Franchising Concept

This innovation in the healthy smoothie industry is ground breaking for South Africa. The machine is manufactured in Australia by a highly skilled team. It took six years to perfect this business model for the consumer market.

The vision of Puré Frooty Smoothie is to offer convenient on-the-go smoothies for anyone. The experience and quality will always be of the highest standard. We aim to be a staple convenience in malls, schools, office parks and hospitals. This is a platform that will allow for self-growth for passionate entrepreneurs.

Our mission is to create a unique customer experience. We want to satisfy the nutritional needs of customers by providing quality smoothies. Puré Frooty Smoothie will be packed with all the goodness a smoothie should offer.

Related: Why Your Franchise Should Adopt A Shared Value Business Model

The four values we pride ourselves in are:

  1. Convenience
  2. Consistency
  3. Quality
  4. Customer Satisfaction.

Why Consider This Franchising Opportunity

healthy-smoothie-franchise

Extensive research into the business model and market

Puré Frooty Smoothie was an idea, researched widely, by people looking to simplify the business process for the consumer and business owner. There was a gap in the market for simplified customer service and a demand for a quicker turnaround time.

Simplified process for setting up a business

For an entrepreneur it can be very overwhelming to start or buy a new or existing business. There are so many crucial decisions that need to be made from the beginning and new concepts to adapt to.

Puré Frooty Smoothie simplifies that drastically:

  • Free-standing machines: The business model revolves around a free-standing vending machine which needs to be visited to refill and maintenance.
  • No shop-fitting required: There is no need for shop fittings or a large work force. All that is required is an inside space for the machine with a power supply.
  • Minimal human resources needed: In terms of a work force, you could either do it yourself or have one person to assist you. There is also a part time involvement where refill station teams can refill and maintain the machine.
  • Cashless business: The business is completely cashless so there are no worries of a note jam, full cash canister or insufficient denomination rand values. More importantly the machines would do a higher turnover than an ordinary vending machine so safety of no cash is important.
  • Easy tracking of stock and performance: A cloud-based system is linked to the point of sale which allows you to monitor your performance and stock from the back-office platform at any given time.
  • Efficient handling of maintenance: With a live point of sale system, the business is linked to a software which monitors the operations of the machine. Should anything malfunction an immediate notification will be sent with a diagnostics report.
  • Human error is eliminated: Everything is done with a computer which leaves little to no room for errors. It is self-order and very user friendly.

Related: SA Fast Food Franchising On The Rise

Why Will Customers Love It

Puré Frooty Smoothie offers a vending machine that can produce a delicious smoothie in forty seconds. An informative touch screen ordering panel which displays all the nutritional information of the smoothie ordered and has the current news and weather.

No time wasted for the consumer. In fact, it’s a learning session disguised as a waiting period. The machine has two wash cycles after every smoothie is made to be freshly prepared for the next smoothie, business hygiene is important.

Consumers live in the fast lane. We are looking for something quick and most times we would like to be healthier. With the hustle and bustle of today’s life every little bit helps. Puré Frooty Smoothie fills that gap in the market.

Interested in Becoming A Franchisee?

Visit our Franchise Info Page for everything you need to know about how to become information a Puré Frooty Smoothie Franchisee owner.

You can also call or write to us:

Phone / 012-942 6360
Email / info@purefrooty.co.za 

Want to know more about this franchise? Watch the video below for more.

 

ent_mag_6-11-18

Continue Reading

Researching a Franchise

4 Top Tips To Find Your Best Franchise Opportunity

The President’s recent Job Summit highlighted the critical need to reduce unemployment. The franchise sector employs 369 573 people, 93 percent employed by individual franchisees rather than franchisors.

Richard Mukheibir

Published

on

franchise-opportunity

Several years of strong sectoral growth combined with business opportunities that are often backed by an investor safety net is making franchising the top choice for many who want to own their own business.  This assessment is based on the strong foundations of my own experience of establishing Cash Converters nearly a quarter century ago and the recent results of Franchise Association of South Africa (FASA) annual industry survey.

These figures show that the SA franchise industry has grown its turnover by 55 percent from R465 billion in 2014, when FASA conducted its first survey, to R721 billion in 2017. Alongside this, the sector’s contribution to South Africa’s GDP has expanded by 62 percent, from 9.7 percent in 2014 to 15.7 percent in 2017.

The President’s recent Job Summit highlighted the critical need to reduce unemployment and boost the national economy by growing business and stimulating job creation. The franchise sector employs 369 573 people, 93 percent employed by individual franchisees rather than franchisors.

Franchising can be a win-win for franchisees. It enables you to make your dream of running your own business come true as well as contributing to providing much-needed new jobs.

These factors make franchising a particularly attractive option for those wishing to start their own business. But with 865 different franchise systems active in the country last year, the huge range of choice can be confusing.

Related: Key Phases Of The Franchising Relationship

To prevent analysis paralysis and ensure you can get set to make the most of franchising, I can offer four top tips for selecting the best franchise opportunity for you:

1. Choose a credible brand

As you shortlist franchisors that appeal to you, go beyond what they tell you about themselves and find out about what people are saying about them. Do social media searches to find out how consumers are reacting to the product or service offered, pricing and customer service. Your franchise fee should buy you a halo effect thanks to your franchisor’s good reputation. Too much negativity around the brand will affect the potential success of your franchise, from your ability to attract customers and the turnover and profit you can hope to generate.

2. Look for a proven business model

A worthwhile franchise shares with franchisees the intellectual property it has developed over the years. It has created and grown this business model over time, knocking off rough edges and fine-tuning systems for mistakes as they become apparent. Check the brand’s news history online as well as its own sales material. Be wary of any franchise that claims to be perfect or invincible.

Nobody is – so either it has something to hide or it is fooling itself. Either way, such a brand is not keeping its eyes open to navigate the brand and its franchisees through the changing fortunes of business.

Related: Thinking Of Going Into Franchising?

3. Check the support systems

Getting relationships and systems right is vital in business success. They have become even more important since we founded Cash Converters nearly 25 years ago because the volume of legal compliance has mushroomed. Make sure that the franchises you shortlist offer you support in coping with this and that those running the brand are in touch with what happens on the ground in the franchisees’ stores. At Cash Converters, for example, our front-end support staff are in stores every day and the directors devote three days each month to visiting stores. This ensures that our expertise is available to guide the franchisees through any business issues they face.

4. Follow the recipe

When you sign up with a franchisor, you receive access to its business model, including the “recipe” for running your franchise. This forms a kind of safety net so you do not need to reinvent a wheel when setting up your business. But you cannot complain that the business model does not work if you do not implement it. This is one of those times when you must follow the recipe to bake the cake successfully. If you are not the kind of person who wants to do that, then think again about whether franchising is for you.

Continue Reading

Company Posts

Don’t Tread On Toes – Why Investing In A HIQ Franchise Will Offer You More Opportunities

Are you looking at investing in a tyre replacement and service industry? Look no further than the Hi-Q franchise.

HI-Q

Published

on

By

grosvenor-crossing-hiq

Vital Stats

Established in 1999, Hi-Q is a successful and diverse multi-product, multi-brand leader in the tyre replacement and service industry with a network of over 130 franchisees nationwide.

With the support of international tyre giant Goodyear, Hi-Q has established a solid reputation of ‘the one you can trust’, and the Hi-Q approach and philosophy is embedded in this.  We have the trust of our customers, our network and our suppliers – that’s why you can trust us to take you and your business to the next level.

When you’re working with people’s safety, trust forms the most significant part of the equation

Hi-Q introduced the original and innovative TyreSurance initiative – the only aftermarket tyre damage guarantee product that backs the consumer no matter the brand of tyre. Each Hi-Q Franchise offers a broad range of brands within the different product and service categories that customers know they can trust, and at prices they can afford. Product and services include tyres, exhausts, shocks, batteries or brakes, wheel alignment or balancing, and a 10-point safety check.

We have identified areas of opportunity to extend our Franchise footprint growth. If you are looking to join a new franchise and you share in our values and vision, we would like to hear from you.

For further information on how to become a franchisee, call us on +27 11 394 3150.

tyresurance-visual

Related: We Want To Invite You To Join Us On The Hi-Q Journey And Become A Franchisee

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending