Your first interview with a potential franchisor is a significant moment in your business and financial journey. For your own due diligence, it is ideal to prepare a list of questions for the franchisor that when answered, will enable you to decide whether to invest your time and money into their franchise.
However, there are two sides to the coin. Most franchisors have already identified what characteristics and attributes are ideal for their business model, and will be asking specific questions to determine if you have what they are looking for, or have what they wish to avoid!
Those who manage to balance these two aspects during an interview are more successful in creating a positive first impression and entering into an agreement with a franchise of their choice.
1. What are your short term and long term goals?
This needs to be more specific than simply ‘making a profit’. If you have any special requirements that are important to you, such as working from home, finishing work at 3 to pick up the children from school, or hiring family members, it is ideal to mention this. These may not be deal-breakers, but for both parties it is ideal to air these requirements up-front, that way they are more likely to be accommodated.
2. Why do you want to buy a franchise?
Franchises have a more complex business structure than most small businesses. The franchisor will expect a basic understanding of how franchises work and what your expectations are, to ensure it is suitable for you.
3. Do you have any experience in franchising?
If you have had previous success in franchising, this may demonstrate that you understand the franchise business model and know how to make it work. Those who have been part of an unsuccessful franchise should demonstrate that they understand what went wrong and how they plan to avoid the same mistakes in the future.
4. Do you have experience in managing a business and/or leading people?
You may not need to have managed the same type of business – many business management and people management skills are transferrable across industries.
If you can demonstrate your ability to manage cash flow, build and manage a team of motivated employees and plan for the future, the franchisor will feel confident in you.
5. How do you manage customer service?
Being able to provide great customer service to happy customers is great, but the franchisor wants assurance that you can handle dissatisfied customers, complaints or occasions when things simply go wrong for unforeseeable circumstances. Customers don’t isolate a negative experience to a particular franchise location, they will associate the experience with the entire business. By allowing you to trade under the franchise name, the franchisor is risking their reputation.
6. Do you have any skills or experience within the industry?
While many franchisors provide training to ensure that your skills and knowledge are up to the required standard, however having some kind of experience demonstrates that you are capable and interested in working in that field. The franchisor is looking to avoid taking on a franchisee that may decide after six months that the industry is not suitable for them.
7. What location do you wish to operate in?
Many seek to become a franchisee as part of a lifestyle change, hoping to work closer to home. Your location is also important to the franchisor, who may be looking to expand into lucrative untapped suburbs or ensure you don’t encroach on an existing franchisee’s territory. It is best for both parties to be upfront about their expectations.
8. What are your expectations for profit?
Most franchisees don’t make a profit in the first year. A franchisor is looking to manage expectations as well as ensure you have enough funds to last until profit is foreseeable.
9. How will you fund this?
A franchisor understands that during your first year of operations, money will be tight. The franchisor will be likely to enquire about your net worth and liquidity – they are looking for assurance that you have access to savings if necessary. They want to know that you can fund your life outside of work. If you are unable to pay your house mortgage and provide for your family, this will impact your ability to fund your franchise, as well as maintain focus.
10. What is your growth strategy?
Are you someone who goes through the motions each week, or do you make plans to increase customers numbers, as well as profits from each customer? Relying on a franchisors marketing and leads is not enough – growth starts from the bottom up!
11. Do you have an exit strategy?
Franchisors understand that many buy into a franchise with plans to achieve profit and growth, do the same with a second or third franchise, and then exit. Your answer to this may not be a deal breaker – by being upfront the franchisor can then help you to reach your goals faster. Your success is also the franchisor’s success!
Triple O Property Maintenance have franchise opportunities throughout Melbourne. Work close to home and take command of your own large exclusive area. Benefit from ongoing training, support, as well as marketing and advertising support. To find out more, contact Ian Izzard for a friendly chat.