What Questions Should I Ask Other Franchisees Before Buying a Franchise?

For many, purchasing a franchise will be the most significant investment they’ll ever make, and no one should ever buy a franchise without performing the proper due diligence. And while looking over the Franchise Disclosure Document or visiting a Discovery Day is important, candidates should also consult with those who know the day-to-day life of the business best — the actual franchise owners. Talking to existing franchisees who already have experience operating the specific business can give candidates a fuller understanding of the brand and the franchise requirements.

“Owners can hear all they want from our corporate ambassadors at the company, but the very best thing to do is to reach out to other franchisees,” said Rusty Bills, chief operating officer at hot dog franchise brand Wienerschnitzel. “We encourage prospects to reach out to existing franchisees to make sure they back up what we are saying. Last week, we had someone come in and say they talked to an owner, didn’t even tell us the name, and that it was a huge reason they signed on.” 

Getting a range of opinions is crucial. Franchisors might have a list of recommended franchisees to speak to, but don’t limit yourself to only contacting these individuals. Moreover, consider speaking to those who have left the system to get their perspective and experience with the brand. A good rule of thumb is to call 10 to 15 franchisees. The contact information for these owners should be found in Item 20 of the FDD, which offers a spreadsheet that contains all the franchises that have opened, closed or transferred in the past three years. 

So, what kinds of questions should candidates be asking during these conversations? The most helpful questions are those that may not be answerable through the FDD, such as whether the experience has been fulfilling, whether it met the person’s expectations, whether the leadership team is as supportive as they claim, etc. 

“They should be asking questions like: what kind of support can I expect when a restaurant opens? How is the construction process? The people who come in with those questions in the beginning will be better suited in the long run,” said Bills.

Similarly, Bills says prospective franchisees shouldn’t be afraid to ask the tough questions when talking with other franchise owners. “They want to know the kind of money they can make, but they should also be asking about the challenges,” he said. “That is what I would want to know. Sure, the brand is fun and has a great history, but it isn’t always warm and fuzzy. If someone calls out sick, you’ll have to grind. We pride ourselves on our ability to work the line at any time and the franchisee needs to know how to do that too. People who don’t understand what to expect will always be surprised, so asking the right questions and having a dialogue is important.”

In addition, talking to existing franchisees can give candidates valuable insight into the true culture of the franchise system and the type of network they will be joining. 

“There is always going to be some hesitancy when you consider becoming a franchisee and following someone else’s path and guidance,” said Christmas Decor* franchisee Adam Anderson. “A big part of the reason we fell in love with the brand was because of the network of franchisees — that is where success comes from. The strength of that network can provide franchisees with valuable lessons and best practices, and franchisees should be able to reach out to other owners, ask questions, visit locations and see how they operate.”

By reaching out to established franchisees, candidates can be better prepared to analyze the specifics of franchise opportunities and discern which ones are well-positioned for success and best fit their individual needs.