For those that are considering buying a franchise, this video is for you, it is really important that you ask key questions to the franchisor.

Patrick teaches us what to ask him. No doubt about it! Watch the video! And if there are any questions you'd like to incorporate, feel free to post them in our comments.

You can read the blog here: https://www.visafranchise.com/blog/10...

00:00 Introduction
00:18 What should I know about joining your franchise system?
00:37 What competition is there in the field?
00:48 Can you give me a breakdown of all the starting expenses?
01:00 Explain the contractual responsibilities if I join
01:34 What does the training program look like?
01:44 Goods and services
01:54 What is my protected territory?
02:07 How many franchised units have failed?
02:18 How have previous disputes been settled?
02:30 What happens when I want to retire from the business?
03:06 Conclusion
03:22 Download our guide

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So for those that are considering buying a franchise, it's really important that you ask key questions to the franchisor. I'm gonna go through today's video, top 10 questions that you should be asking a franchisor before you continue through the valuation process of buying that franchise.

Number one, what should I know about this franchise before entering the system? It kinda keeps it open, and they can tell you all about all the different reasons why you should invest in the business, why they're motivated to continue growing the business. It keeps it pretty wide open.

Number two, what's the competition like? Are there other franchises in the space, momandpops, big corporately owned and managed businesses that you're competing with?
Number three, ask for a breakdown of all the expenses that you can expect to open up the business, get it to the point of breakeven, as well as ongoing monthly expenses for running a franchise.

Number four, ask them to explain the contractual obligation of being a franchisee. How long is it for? Do you have to pay another franchise fee, half a franchise fee, or nothing if you wanna renew after, say, 5 or 10 years? Are you able to buy products and services from any vendor, or do they have to be preapproved? And also ask how the franchisor makes money beyond the royalty, if they're making money in other ways, beyond the initial franchise fee, and then the royalties they collect.

Ask what their training program looks like. Are there an initial two weeks onsite? Also, how is the ongoing training?

Number six, ask how they award territory. Are there exclusivities? Is there a possibility to expand, where you just might wanna commit yourself to open up one location?

Number seven, are there shared learnings between the franchisees? Does the franchisor help with facilitating conversations with franchisees to share best practices?

Number eight, and now we're getting a little more direct to the point. How many franchise units have failed since the system opened, and can you give the reasons for why they failed? Number eight, getting a little more direct. Ask how many locations have failed and asked for reasons why those locations failed.

Number nine, ask if there have been any previous disputes with the franchisor and franchisees that have ended in a lawsuit or a major disagreement, and ask how they were settled.

Number ten, what happens when I wanna retire from the business or move on to some other activity? Is there some precedent in terms of how much these businesses are sold for? Is there a possibility for the franchisor to buy it back, franchisee to buy it back? When you ask this question, it's really important to stipulate that you're very enthusiastic about the brand, but you wanna always think about what might happen in 5, 10, 15 years, and you wanna basically understand what the exit strategy is and potential options.

So those wrap up the questions that you should ask franchisors. We also did another video on the top 10 questions to ask franchisees. These are not all the questions that you should be asking franchisors nor franchisees, but these are 10 important questions to ask. If you'd like more questions and see our guide, you can download it in the description section. Until next time.