It is always advisable before taking up a franchise of any brand that a franchisee should ask certain questions regarding the deal.
With the start of the festive season, the store launches of brands are also going fast. Most brands prefer to open their franchise stores during these auspicious days. But, what about the franchisee? Is he ready enough to do proper queries from the franchisor? Or in the hustle bustle of the festivities, they miss out on important aspects? Many franchisees hesitate in the first place to ask slightest of the questions. We tell you what to ask your franchisor before finalising any deal.
What is the actual investment
You must always ask the franchisor on the real investment because usually there are a lot of hidden charges that are told to you at a later stage.
How much money will i make?
Usually most franchisees are in a dilemma about this question and ask the franchisor for which they never get a definite answer. Most franchisees do not make great money in the starting first few months and secondly, it can differ from country-country and city-city.
Why should we join hands?
In any case, if you are getting franchise rights for a very big brand or if you are holding hands with a developing brand, you must ask this to your franchisor that why should you both join hands as franchisor and franchisee. For a perfect business you both need to be likeminded people.
Will there be any financial support?
Don’t hesitate to talk on monetary angles. Ask your franchisor if he will help you in any ways with financial support? Speaking on the same Prashant Kulkarni, Founder of India’s first trademark Pani Puri brand, Chatar Patar comments: ‘There are a lot of queries by the franchisee and it’s their right to ask. Usually in a food business like ours many other questions are also raised by the franchisee like what will be the minimum order quantity? Seasoned investors also want to know if you are the manufacturer of the product etc. Such questions should be asked for better clarity.’
Will there be any marketing support?
Always know what kind of marketing and advertising support will be provided by the franchisor at the local level. It is very essential for the growth of the brand when you are starting in a new city. PR campaigns on radio, TV, print and online are equally important.
Know your territories:
You must always know about where you can open your stores and in which specific areas?
Ask you franchisor he will help you in finding the right location. Most franchisors generally guide the franchisees as a wrong location will directly affect the goodwill of the brand. A right franchisor will help his franchisee with all his local contacts.
About the franchisee fee
Know the exact amount of the franchise fee from the franchisor. Ask if it can be adjusted a little bit or not.
Who doesn’t need a training afterall to start a new business? Ask your franchisor about the training that you will be provided? Will it be at a local level or you will be sent to the headquarters for a detailed understanding of the brand etc.
Can you sell off?
Though it is very early to ask such questions but you should always be straightforward and ask your franchisor that if you want to sell off your franchise store in next 5-10 years, are you allowed to do that? Is there an exit strategy?
So, there can be lot more queries in a franchisee’s mind when he goes to the franchisor to finalise a deal. A franchisee must think a step ahead and ask any question that comes in his mind, freely to the franchisor before taking any step ahead. Getting answers to such questions might help the franchisee in the long run and also help to maintain a cordial bond between the franchisor and franchisee.