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Franchising - questions to ask franchisors print Print

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Asking the right questions to the franchisor is so important when assessing a franchise opportunity. The following questions are designed to help you gather some of the information you require from the franchisor.

About the Business

What is the history of the business and its key personnel?

How many years has the franchise been in operation (NZ and overseas)?

How many outlets does it have (NZ and overseas)?

 

About the Market/Industry

Is this a growth industry (is there evidence or research to support this)?

What are the major trends in the industry?

Who are the major competitors (at local and national levels)?

What market share does the company have (at local and national levels)?

What are the major threats and opportunities in the market?

 

The Product or Service

What is special about the franchise's products or services?

Why are they better than those of your competitors?

Can they be copied or sold by anyone else?

Are the trademarks, logos, domain name and trade name of the company all registered?

Do you have to sell certain products or services?

Are you restricted from selling certain products or services?

What are the top-selling products and services?

What plans are there for future products and services?

 

Marketing and Promotion

What is the marketing budget and how is it spent?

Does the company have a marketing plan that you can see?

Are there examples and results of previous marketing campaigns?

What freedoms/restrictions are there on doing your own promotional activity?

Do all franchisees take part in national campaigns? Are you required to take part in special promotions?

 

Recruitment and Training

What are the training requirements for yourself and your partner prior to buying the franchise?

Is there an operating manual (when was it last updated and how often is it updated)?

What ongoing training is provided?

How do you recruit staff for your business - what assistance is given to train them?

 

Costs

What set-up costs (including costs for fit-out, lease negotiation, training, professional fees, plant and equipment etc) are involved?

How much needs to be paid and when?

How often will new equipment, new fit-out etc be required?

What ongoing costs (including royalties, advertising levies, training, stationery, uniforms, purchasing supplies etc) are involved?

How are these costs calculated and when do they need to be paid?

If you are required to purchase supplies from the franchisor, what is the margin? Can prices be raised?

Are there any benefits from bulk purchasing?

 

Recruitment and Training

What are the training requirements for yourself and your partner prior to buying the franchise?

Is there an operating manual (when was it last updated and how often is it updated)?

What ongoing training is provided?

How do you recruit staff for your business - what assistance is given to train them?

 

Day-to-Day Operations

What is your actual role in the day-to-day operation of the franchise?

What hours do you need to work in your business and on your business?

What are the opening hours?

What accounting and administration requirements are there?

What systems and software programs are there to help with this?

What administrative support does the franchisor provide (if any)?

 

Financial Performance

What sales, profit and ROI do other franchisees make?

What is projected for this franchise?

What are these figures based on?

What are the key variables that might affect these figures?

 

Set-up and Opening

Is assistance provided to launch your business - promotion, people on hand etc?

Who finds the site, negotiates the lease, signs the lease etc?

Is assistance provided with getting insurance, leasing vehicles, signwriting etc?

What other assistance is provided in the first few months of operating?

 

Ongoing Support

Are there franchisee support staff?

How much time and what type of support can you expect of them?

What systems are in place to monitor and improve performance?

How do you keep in touch with other franchisees and how do they keep in touch with each other?

 

General

What are the keys to success?

What are the common pitfalls?

What restrictions are there on selling the business?

What restrictions/options are there on expanding?

 

Problems

At what point can you still withdraw from the franchise - after signing the Agreement, undergoing training etc?

What happens if the site just doesn't work due to poor location, a new competitor etc?

What happens if you have operational problems or get sick?

Have any franchisees failed - why and what did the franchisor do?

Do all franchisees take part in national campaigns? Are you required to take part in special promotions?

 

Further information:

To talk to an ANZ Business Specialist:
Call 0800 269 249
Visit anz.co.nz/business
Visit your nearest ANZ branch

 

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