Questions to Ask a Franchisor

• Determine what assistance the franchisor provides. Do they assist with training, store design, location construction, site selection, and feasibility studies?

• Do they have any access to demographic studies to get an understanding of the audience within the market area.

• What types of support will the franchisor provide once your franchise has opened its doors?

• After the initial investment, will there be additional financial obligations requiring working capital?

• Does the franchisor offer any form of financing?

• Ask the franchisor how many franchises have been sold in the state you will be operating in during the last 12 months and how many have been opened for business?

• What types of territorial restrictions and protections have been set up by the franchisor?

• Is the franchisor planning on expanding within your state? Are they focusing on any specific locations?

• What arrangements are established through the franchisor in terms of product supply?

• Ask to see a current price sheet.

• Ask if the franchisor has been forced to terminate any of its franchisees and detail the reasons for this decision. Have any franchisees failed or gone bankrupt?

• Are there any current lawsuits pending or past judgments against the franchisor?

• What steps are taken to settle disputes between the franchisor and franchisees?