Questions to ask when considering buying a franchise business

by Geoff Elias| General Manager | Muzz Buzz
Questions to ask when considering buying a franchise business

Geoff Elias| General Manager | Muzz Buzz

When considering the purchase of a retail franchise business, it is important to ask the right questions.

Muzz Buzz General Manager Operations Geoff Elias has had plenty of experience in retail franchising throughout his career, and has prepared a list of the right questions for potential franchisees to ask, when considering the purchase of a retail franchise business.

What is the total cost of acquiring the franchise business and how are the payments structured?

This question is crucial as it will give you an idea of how you can finance your business purchase and if you can indeed afford to get a franchise business. This question will also allow you to consider what assets you plan to use to fund, or borrow to fund your purchase of a franchise business.

Asking about the structure of the payments will give you a better understanding on how the deal is financially structured and whether it requires a significant initial cash investment on your part.



"While it' s great to go into the process of acquiring a franchise with enthusiasm and high hopes, you also need to go into the process with a sober, professional and realistic attitude and arm yourself with as much good information as you can. The best source of this information comes from existing franchisees."

Does the franchisor provide initial and on-going training for the franchisee?

A training course is vital for new franchisees as it ensures you're not going to be thrown into the deep end. It can help you to familiarise yourself with the day to day operations of the franchise business. As well as this, on-going training will give you the chance to become more confident in running the business and help identify where potential issues might arise. Once you have set up your franchise business and it is ready to operate you're still going to need assistance and opportunities to develop your skill set. Ongoing training will ensure that you are able to deal with the issues and problems that every business owner faces.


"While it' s great to go into the process of acquiring a franchise with enthusiasm and high hopes, you also need to go into the process with a sober, professional and realistic attitude and arm yourself with as much good information as you can. The best source of this information comes from existing franchisees."

Geoff Elias


What marketing strategies does the franchisor employ and are these strategies centred on a robust brand image underpinned by appropriate brand values?

This question will give you a feel for the marketing strategies that the franchisor has in place, to assist you in attracting more customers and to better promote your products or services. In particular, this will help you understand what programs the company has developed to accomplish sales growth, and how it is that these programs have consistently worked in other locations across the country.



Does the franchisor have good supply networks in place?

As a franchisee, it is important that you ensure that your organisation has the right suppliers in place. This will ensure that your supply chain is adequate for the needs of your business. It will also enable you to understand whether a franchise support manager will be available - especially for a newer franchisee - to negotiate with the supplier, should potential issues arise.



What do other franchisees say about the business? Speak to them as they are your best source of information on the franchisor.

Geoff suggests that anyone looking to acquire a franchise business should speak to as many franchisees from the business as possible, and try to get a clear and honest idea of what they say about the business.

"It's vital that you do your homework and conduct a thorough due diligence before committing to buy a franchise. While it' s great to go into the process of acquiring a franchise with enthusiasm and high hopes, you also need to go into the process with a sober, professional and realistic attitude and arm yourself with as much good information as you can. The best source of this information comes from existing franchisees".

Speaking to as many franchisees as possible presents you with a good cross section of opinions. Inevitably, there will be better and poorer performing franchisees. You do not want to limit yourself by hearing only one side of the story, such as speaking to only one or two franchisees that represent the brand in an overly positive or exaggeratedly poor light. With many franchisee inputs, a clear and consistent story should start to unfold.

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