Guide to Buying Another Franchise: Talk with Franchisees

For a truly transparent account of what franchise ownership with a brand looks like, you’ll need to speak with existing franchisees rather than relying solely on information from the franchisor.

1851 Franchise spoke with Liz Leonard, franchise advisor and author of “Your Franchise Fast Pass,” to learn more about how engaging with current franchisees can provide invaluable insights you need to make an informed decision about your investment. 

Diverse Perspectives

Firsthand accounts can provide a clearer picture of daily operations and potential challenges that may not be included in materials provided by the franchisor. However, it's important to note that individual experiences can vary, so it's advisable to collect diverse perspectives if possible. Leonard suggests talking to a variety of franchisees, including owners at different stages of the business ownership process.

Leonard recommends speaking with at least 6-10 franchisees. It will be beneficial to have conversations with individuals who have recently completed their training program, as well as those who have been part of the franchise system for a longer time. This approach ensures you get a broad understanding of the entire process and what you can expect at every step.

“One key component in your research will be understanding what your day-to-day life will look like as a franchise owner with the brand,” said Leonard. “Ask questions to get to the bottom of what the role of the owner is within a particular franchise concept. Is the owner truly able to focus on working on the business rather than being consumed by the day-to-day operations?”

Pay close attention to the advice provided by successful franchisees, as understanding the strategies of top performers can pave the way for your success.

“When learning about the franchise system, think about successful franchise owners you admire,” Leonard said. “If you find someone who has achieved what you want, ask them lots of questions.” 

Financial Insights

While franchises do provide financial insights in their Franchise Disclosure Document (FDD), franchisees can share detailed financial information that franchisors are often restricted from disclosing due to regulations. 

During franchisee interviews, Leonard advises asking about the business’ progress and achievements, including its year-over-year growth and profit margins. She also suggests checking into the franchise system’s strength, return on investment, initial capitalization and ongoing profitability. This transparency helps you assess the financial viability of the franchise. 

According to Leonard, the most important question you can ask a franchisee is: “Would you do it all over again?” This question gets to the heart of the franchisee’s satisfaction level with the entire franchise ownership experience.

Ensure Your Goals Align With the Opportunity

For those considering expanding their franchise portfolio, Leonard advises having a strong grasp on your goals and reasons for doing so. This will help you formulate a list of questions to ask franchise owners during the vetting process so you can be sure that you are selecting a concept that aligns with your vision.

“Speaking with existing franchisees provides you the chance to evaluate your potential staffing model, the capital needed for expansion and your role in the business,” said Leonard.

If, after assessing your motivations and speaking to franchisees, you find that your goals cannot be met with a particular brand, don’t be afraid to move on or reevaluate growth strategies. In the meantime, Leonard cautions you not to lose focus on your existing business ventures, as there is often room for growth within your business.

“It is important to be content with what you have,” Leonard said. “More isn't always better.” 

Every great franchisee had help buying a franchise. Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit www.1851growthclub.com and start your journey.