Before buying a Franchise

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Questions to ask before buying a Franchise





76 due diligence questions.


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Top questions

  1. How experienced is the franchise owner?
  2. How much training and help will the franchise owner provide?
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In general

  1. What makes this franchise special and unique compared to other franchise alternatives?
  2. What makes you like this Franchise over other franchises?
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About you

  1. A franchise is typically dictated by standard operating procedures and specific rules that need to be followed for the franchise owner to ensure uniformity in the product. Does your personality type match this type of day-to-day operations?
  2. Buying a franchise will take a lot of your time - especially in the beginning. Do you have the support of your family to invest this time?
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The investment

  1. Does the franchise owner require that you make an initial investment? If yes:
  2. -How much is the amount?
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Franchise owner

  1. What guidelines are provided by the franchise owner?
  2. Does the franchise owner offer any financing? If yes:
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Competition

  1. Are there other direct competitors from the same franchise in the area?
  2. Are there other competitors from similar franchises in the area?
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The product

  1. What are the profit margins?
  2. What product generates the most revenue?
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Location

  1. Do you or the franchise owner decide on the location?
  2. What considerations have gone into selecting the location?
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Day-to-day operations

  1. Who does the bookkeeping?
  2. Who controls the cashflow?
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Exit

  1. If one day you want to do something else or retire, how does that work?
  2. Can you sell the franchise to others or does that require the franchise owners approval?
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Other questions

  1. Have you talked to other franchisees ? If yes:
  2. -What are they saying?
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