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Do You Want to Buy a Great Franchise? Talk with the Franchisees First

Franchise talk

Franchise talk

You have done your homework and have found a great franchise to buy. What’s the next step?

There are many paths you can take as your next step, but I suggest you to talk with the franchisees of the franchise company you are interested in. Most likely than not, having a chit-chat with several franchisees will give you an idea or two about the franchise companies – good words and bad words.

A great franchise company is the one that has franchisees as the evangelists. Of course, franchisees are generally required to keep all the “secret recipes” remain as, well, secrets. However, they do have something to share to other, especially in day-to-day operations and franchisors’ support.

I was also visiting the franchisees’ stores of the franchise company I am interested in. I do get some idea that is not shared by the franchisors, and they are clearly helping me make a decision whether to buy the franchise or not.

As a franchisee, I was, too, approached a couple of times by franchisee candidates that are interested in buying a franchise unit of the same franchise company I am with.

From my experience, these are the questions often being asked by franchise candidates (I asked some of these, too, when I was one):

  • Is it really that profitable? Could you share some numbers, please?
  • How’s the franchisor’s support? Will the franchisor help me manage my franchise unit?
  • Will the franchisor helps me in staff recruitment?
  • Are you allowed to source products from different suppliers?
  • Are you allowed to sell other line of products different from those of your franchisor’s?

Although some of those questions are supposedly asked to the franchisor, but the franchisees are generally offer some different, rather interesting, answers. The answers will give us some insights and help us understand whether the franchisors and the franchisees ‘play by the rules’ laid out in the agreement and SOP or not.

Some glowing references from the franchisees should encourage you to go forward with the purchase, while negative words should help you to consider your options – All in all, use your ‘intelligence reports’ to weigh your decisions wisely, with consideration to your ‘gut feelings’ and mindset/knowledge about franchising you have.

Ivan Widjaya
Franchise investigation
Image by harrykeely.

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2 Responses to “Do You Want to Buy a Great Franchise? Talk with the Franchisees First”

  • Ivan, I just saw your about page. Nice job. What franchise were you a franchisee of? Maybe you could share your experiences..

    The Franchise King
    Joel Libava

  • Ivan Widjaya:

    Thanks for the good words, Joel…

    Unfortunately, I’m trying to avoid mentioning “names” (it’s not related to NDA or anything like it – My personal preferences…)

    However, I could offer these facts:

    I’m located in South East Asia and have involved with a local leading business services franchise (similar to PostNet or Mail Boxes, Etc.), the business concept and potential is great, unfortunately I have to sell and close my stores due to financing pressure on my side (I use something similar to Small Business Loan, and the recession hikes the interest rate, and just like a domino effect, it affect the bottom line of my franchise units) – I closed one and sold another one back to the franchisor.

    I have built a great relationship with my ex-franchisor, so that we can share some insights even after I ‘divest’. I also involved in some other business opportunities, a family business own some web properties, and is researching to invest in two local franchises I track (and investigate) after I gather myself and recover from the recession hard hit.

    Hmm – Maybe I just add those to the About page 🙂

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