Questions You Should Ask Your Potential Franchisor

1. What is the risk involved with franchising and how do you (the franchisor) intend to minimize that risk?

2. What happens if I decide I no longer want to operate the franchise? Do you (the franchisor) have a policy that requires me to pay a cancellation fee?

3. Do you have any lawsuits against your franchise? May I see the list of lawsuits?
(Look at reasons sited to see if there is a pattern).

4. What is your franchisee turnover rate? Can I have a list of the franchisees that left?

5. How much money can I potentially earn? - They should not answer this question, as the law prohibits them. Be careful of the ones who do answer this.

6. Do the company-owned stores provide most of the support for the parent company? (Should be a yes to avoid over-dependence on the royalty stream).

7. Is your franchise trademarked? (Should be because its what you are buying with the franchising fee).

8. How long is your franchise-training program? (Don't want it to be too short/long).

9. Can I see some of your company's financial statements?

10. Can I have a list of all the current franchise owners close to my area? (Speak to the owners and discover their level of satisfaction and profitability).