Wondering how to evaluate franchise opportunities? Here are the 8 most essential questions to ask a franchisor to learn what matters most about each franchise.
Evaluating a Franchise
Investing in a franchise business is a big commitment of money and effort. You may be ready to make a career change, build a nest egg for retirement, or expand an already impressive investment portfolio by buying a franchise. But before you agree to sign the franchise agreement, it’s important to understand as much about the business you’re buying as possible.
Making an informed decision comes from doing some research. Of course, you need to know if you meet the franchisor’s criteria for becoming a franchisee and if you can afford the initial and ongoing costs to get your new business up and running. You also want to make sure the franchisor is a good fit for your goals as a business owner and investor.
8 Franchise Questions: The Deal Breakers
There’s more to buying a franchise than simply having the finances lined up to do so. Before you sign on the dotted line, let’s go through eight of the questions to ask a franchisor you may not have thought of before.
- Is the franchise financially strong? Investigate the brand’s current financial health by looking at the most recent financial performance information supplied in Item 21 of the Franchise Disclosure Document (FDD).
- What is the background of the company’s executive team? Learn about the brand’s leadership team, their experience, and their vision for how they’ll expand the brand.
- How does the franchisor support franchisees? Every franchise is different when it comes to getting to opening day as well as ongoing support that is provided once your business is up and running. Find out how a brand offers training, marketing, advertising, and operational and tech support.
- Has the franchise been involved in litigation? Bankruptcy? Examine the reputation of the franchisor. Local consumer protection agencies are good resources for this type of information, as is the Better Business Bureau.
- What does the franchisor see as their biggest competitive threat? And where do they see their biggest opportunity? You want a franchisor who is realistic, aware of their competition, yet optimistic about market demand for their products and services and growth potential.
- What beneficial vendor relationships have been established? Key benefits of franchising often involve purchasing power and smooth supply chains due to the advantageous relationships a franchisor has developed with vendors and partners.
- What growth opportunities exist for you as an owner? Will you be able to scale your business? Ask about available territories and what incentives exist for multi-unit investors. Once you’ve learned how to successfully operate one franchise unit, why not increase your earning power by opening more?
- Ask to speak with past and current franchisees. They’ll tell you what it’s like to work with the franchisor, the pros and cons of a brand or market, and what the day-to-day operation of the franchise looks like. You can evaluate if the franchise is a good fit for your working style and goals.
American Family Care: All the Right Answers
Filling a need in the healthcare market, urgent care clinics are a fast-growing segment of the healthcare industry. American Family Care has been “putting the patient first” as an industry-leading alternative, non-emergency room urgent care provider since 1982.
One of the fastest growing express care clinics, American Family Care has over 225 clinics nationwide. When you invest in American Family Care, you have the support of a proven business model, the backing of a national brand, and a leading role in a healthcare industry that is predicted to grow at a high rate for years to come. New owners receive training, ongoing professional development support, a turnkey business opportunity, the backing of our vendors and partners, and innovative tech and marketing support.
If you’ve been thinking about healthcare as a business or converting your existing clinic or urgent care center into a franchise, American Family Care has opportunities. If you’ve been considering a career change or want to develop a larger territory owning and operating multiple clinics, American Family Care has available markets. Learn more about what our brand has to offer. Apply Now.