Validation Topics
When talking to franchisees, a prospect should ask a wide range of questions. Some of the topic to cover include:
1. Training Programs and Opening Support - Determine how well the initial training programs and support through getting the first unit opened prepared the franchisees for opening and running their business.
2. Ongoing Training and Support - How effective is the ongoing support services of the franchisor in terms of helping franchisees deal with problems that come up in the running of their business.
3. Advertising, Marketing and Promotional Programs - Most franchisors collect marketing dollars from every franchisee into a pool that is spent to promote the brand. Determine whether the franchisees are happy and supportive of the way this process is handled. Note: This is typically the area you will find the most complaining about in any franchise you look at.
4. Quality of Products/Services – Determine if the franchisees are happy with the quality of the services and/or products offered through the franchisor.
5. Franchisor/Franchisee Relations - Determine how the franchisees feel about the franchisor in general. Is the franchisor supportive, knowledgeable, responsive, accessible, organized, and trustworthy?
6. Financial Health – Some franchisees will be guarded about revealing financial details of their operation but others will be open. Is the franchisee meeting his financial expectations? How much is his total investment in the business and over what time period? How long before they reached break-even?
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