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Frequently Asked Questions

Frequently Asked Questions

Here are some questions you might like to ask. Remember that there are many types of franchises and you may have to adjust the questions to suit the specific franchise opportunity you are enquiring about.

  • What are your long-term plans for improving your company?

  • Do I have to pay a deposit or upfront payment, and if I do not proceed will I lose my deposit or any part of it? 

  • How much working capital do you think I need, and what help can you give me in estimating my projections? 

  • How long will it take to start trading from the time I sign the contract?

  • What will the training consist of, how long will it last and are all training costs included in my franchise fee?

  • What is my expected break even and how long should it take me to reach this figure? Franchisors do not normally make projections and/or earnings claims. 

  • Do you charge ongoing franchise fees  (royalties) and if so what are they and how are they calculated?

  • Do I have to contribute to any other costs such as advertising and promotional expenditure that you incur, if so how much?

  • What help, if any, will I receive if I want to do some advertising and promotion on my own?

  • After I have opened my franchise, what ongoing support will I be provided with?

  • What help and guidance do you offer in finding the right site?

  • Can I be provided with a full list of all franchisees in the franchise network and can I contact them?

  • Do you provide instructional and operational manuals and can I see them prior to signing?

  • Have any franchisees failed, and if so why? 

  • How many franchisees will you have in 5 years?

  • How thoroughly do you vet prospective franchisees to maintain a high standard in the franchise network?

  • Will the territory offered be for my sole and exclusive use?

  • Are you currently operating in areas with similar demographics as my proposed territory?

  • How do you handle grievances with existing franchisees?

  • Does your company see any threats in the current marketplace?

  • What do you do for your franchisees that your competitors don’t?

  • The Franchisor is obligated by the Franchising Code of Conduct to provide you answers to the aforementioned questions inthe Franchisor’s Disclosure Document. We recommend that you go over each one with the franchisor for clarity, as well as making a list of any additional questions you may have during the review process. No question is irrelevant, so be sure to get all of your questions answered, to your satisfaction.

    Very few franchisors will provide earnings claims and/or projections to prospective franchisees. What most franchisors will allow is for a prospective franchisee to discuss earnings and break-even points with their existing franchisees. Every franchise and, each individual franchisee will be different and, there is no guarantee that you will do the same as any of the franchisees you meet. Only YOU can determine the level of your success.

McDonnell, McPhee & Associates  2008 - 2009

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