Franchise Opportunities - Top 7 Must Ask Questions to the Franchisor

Even if you have decided to invest in the best of the franchise opportunities in Kansas City, there still may be a chance that you will make some mistakes. Here are the top 7 must ask questions one must ask of the franchisor before jumping into the opportunity.

1. What is the number and location of other franchises?

This question would let you know if you are not being put in the direct competition with another franchise of the same company. Moreover, more numbers of franchises indicates it to be a profitable deal!

2. Can franchisor provide initial assistance and training?

You may certainly have skills and be mindful of ideas to run your franchise business successfully, but you may still need some initial assistance to better understand the rules and regulations of the company to efficiently take the business off the ground. You should also be financially prepared for the cost of training.

3. What are the fees and total cost?

A clear idea of the total franchise cost is crucial from the very beginning. Apart from the franchise fees, there may be other costs involved like legal and accounting services, insurance, and licensing etc.

4. How are other franchises performing?

The best way to get this information would be to meet in person with the current or previous franchise owners and they would be able to tell you advantages and disadvantages of the business for sale in Kansas City that you are interested in.

5. Ask for federal disclosure document (FDD)

Every franchisor is legally bound to show you their FDD that will have the information about the company’s history and whether there exists any lawsuit against the company or the franchisor. It may also have details of lawsuits with any of the executive or any fraud charges and bankruptcy.

6. What is the past profitability of the franchise?

This can be inquired from the existing franchise of the company. You may ask them to provide you the written copy of the past profitability and forecasted business figures. You may even get the data and figures checked by a professional accountant to avoid the risk of false figure forgery.

7. Ask about company restrictions

There may be a number of company restrictions that you have to adhere to and they could be a uniform or some sort of expansion restriction or even related to in house distribution. You must be completely aware of all such restrictions before investing in the franchise.