Relationships are crucial to starting any successful franchise. During the initial interview with a franchisee, you want to learn about their business approach. After all, this person will be your partner for the foreseeable future.
Like a traditional job interview, this discussion should be a two-way street. The franchisor and franchisee should evaluate each other to determine if they would be a good fit. To help you make this decision, we’ve compiled some hard-hitting franchise interview questions and answers.
Questions a Franchisor Should Ask a Franchisee
First, here are questions for a franchisor to ask a franchisee. Your job as a franchisor is to determine whether this person will likely succeed in operating a unit for your franchise. While the criteria will look different for everyone, these questions can help you zero in.
1. Why Does This Type of Franchise Interest You?
When someone wants to be a franchisee, they often have multiple franchisors in mind. This question can reveal their passion for a specific industry or brand. Maybe they’ve eaten at your restaurant since childhood or see a potential unmet demand for your services. Excitement and genuine interest often rub off on other people and can help the franchisee network, hire passionate employees, and represent the brand well.
2. Where Do You Plan on Opening This Franchise?
Depending on how your franchise handles location planning, your franchisee may already have a spot in mind — bonus points if it’s in their hometown. A franchisee can lean on existing connections and possibly even a local reputation by opening a location in their community. If they’ve already found a location, they’ve simplified part of your job so you can maximize sales with a unit that hits the ground running.
3. Have You Ever Served in a Leadership or Management Position?
While franchise experience isn’t always necessary, some leadership or management skills will help. The franchisee will have many employees reporting to them, even if they hire a manager to handle day-to-day operations. Understanding this responsibility and the unique dynamics of management is crucial.
4. Do You Have Experience in the Industry This Franchise Falls Into?
Part of the appeal of a franchise is that the franchisee doesn’t need to build from the ground up. They benefit from the existing brand and any training or support you can offer. Still, you will want to know if they have experience that will help them in the role, like work in the industry, a business degree, or employment at a similar business.
5. Have You Ever Been a Franchisee Before? If So, for What Franchise?
Some franchisees have previously owned a franchise unit, so it’s worth asking about. They may be familiar with the structure and primed to dive in. If the franchisee had an unsuccessful experience with a franchise, ask about what they learned. Failure is often the best teacher, so don’t count them out.
6. What Makes You a Good Fit for This Franchise?
Like most jobs, your franchisee needs to be a good fit with your franchise’s values and beliefs. Someone who embodies your franchise brand can help you succeed. If they align with the company, you will likely find a better working relationship, too.
Questions a Franchisee Should Ask a Franchisor
If you’re on the other side of the table and looking for questions to ask when franchising, you’ll also need to ensure the franchisor is a good fit. You’ll invest a lot in this partnership, so make sure it’s mutually beneficial and aligns with your goals. Here are some examples of what to ask when buying a franchise.
1. What Are Your Royalties and Fees?
This first question to ask a franchisor before buying will significantly affect your finances. Franchises can have wildly different royalty and fee structures, so make sure you understand your ongoing and startup costs. Royalties are typically a percentage of your revenue, while initial franchise fees cover startup costs like licensing and support staff. Ask about other ongoing fees, such as tech support or marketing.
2. What Type of Technology or Software Do You Use?
The technology behind a franchise can significantly impact your day-to-day operations. From point-of-sale systems to accounting software, ask about what you can expect. One of the most impactful programs for the franchisee is the franchise management system. This platform determines how you interact with the franchisor and manage your unit. Here are some helpful features of franchise management software.
- Reporting tools to help you meet your goals
- Communication with franchisors
- Employee training resources
- Guidance for the franchise’s brand, values, marketing, etc.
- Payment processing and calculations for royalties and fees
If your franchisor doesn’t have a franchise management platform yet, FranConnect has various features to help you and your franchisor succeed.
3. What Goes Into the Location Selection Process?
Some franchisors already have locations selected or retain the right of final approval. Others are a little more relaxed. Talk to your potential franchisor about their approach. You may be able to choose your location or get help from to find one.
Another valuable topic to discuss is how the franchise manages territories. If you open a location and the franchisor allows someone else to open another right down the road, the second location could threaten your success. Many franchisors offer exclusive territories to protect you from these situations.
4. Do You Offer Ongoing Support and Training?
One question to ask a franchisor before buying is what kind of support you can expect. Some franchises are more hands-on than others. If you’re new to franchising, a supportive franchisor might be preferable to one that gives you more freedom.
Consider areas like training, marketing, and tech support. Look for a franchisor who offers assistance that aligns with your comfort level.
5. Can You Give an Estimate to the Total Investment Needed to Open a Franchise?
We already mentioned initial franchise fees, which are only part of the startup costs. Other expenses might include:
- Real estate purchases or renovations
- Professional services, such as lawyers and contractors
- Equipment, furniture, and supplies for general operations
- Insurance, including workers’ compensation, property and auto insurance
Ask the franchisor for a ballpark estimate of what you can expect.
Use FranConnect to Manage Your Franchise
Whether you’re a franchisor or a potential franchisee, the right technology can significantly affect your experience. FranConnect offers various franchise management tools, from training resources to payment processing and reporting.
Before you dive into your next partnership, consider how FranConnect can set you up for success. Request a demo to see it in action or call us toll-free at 844-336-1017 for more information.
Ian Walsh
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