For many aspiring business owners, the idea of opening a franchise is incredibly appealing. It offers the proven business model and brand recognition of an established company, combined with the independence of being your own boss. But before you dive in, it’s essential to ask the right questions. The franchise discovery process is all about due diligence. Here are the top questions entrepreneurs should be asking before they take the leap into franchise ownership.
#1 - What is the Total Investment, and What's Included?
This is often the first question on an entrepreneur's mind, and for good reason. It's not just about the initial franchise fee. A comprehensive understanding of the total investment is critical. You need to know what's included in the estimate, such as:
Equipment and inventory costs
Real estate and build-out expenses
Initial marketing and grand opening costs
Working capital needed to cover operating expenses until the business becomes profitable
A franchisor should be able to provide a clear breakdown, typically outlined in Item 7 of their Franchise Disclosure Document (FDD).
#2 - What Support Does the Franchisor Offer?
The support you receive is a core benefit of the franchise model. Without it, you’re just buying a brand name. Ask specific questions about:
Training: What is the scope and duration of the initial training? Is it hands-on, or classroom-based? What about ongoing training as the business evolves?
Operational Support: Will you have a dedicated consultant or field support representative? How often do they visit? What systems are in place for day-to-day questions and challenges?
Marketing and Technology: What does the franchisor do at the national level to build brand awareness? What tools, resources, and local marketing guidance do they provide? Are there required technology platforms, and what are their costs?
#3 - What is the Franchise’s Track Record?
A franchise’s history can tell you a lot about its health and stability. The FDD, specifically Item 20, provides a detailed chart showing the number of franchises that have opened, closed, transferred, or been terminated over the past few years. A brand with a high turnover rate or a large number of closures is a major red flag, while a history of steady growth and happy franchisees is a positive sign.
#4 - Can I Talk to Existing Franchisees?
This is, without a doubt, the most important part of your research. The franchisor's sales team will paint a picture, but current franchisees live the reality. The FDD will provide a list of contact information for current and former franchisees. When you speak to them, ask questions like:
"With the knowledge you have today, would you buy this franchise again?"
"How long did it take to reach profitability?"
"What were the biggest unexpected costs or challenges you faced?"
"How responsive and supportive is the franchisor?"
#5 - How Does This Franchise Stand Out from Competitors?
You’ll want to understand the brand's unique value proposition. Why would a customer choose this business over a competing one? Look for concrete differentiators, such as:
Proprietary technology or operational systems
A unique product or service
A clear market niche or a loyal customer base
If the answer is vague, it may be a sign that the brand lacks a true competitive edge.
#6 - What are the Long-Term Financial Obligations?
Beyond the initial investment, you need to understand the ongoing fees and how they're calculated. This typically includes:
Royalty fees: A percentage of your gross sales paid to the franchisor.
Marketing/Advertising fees: A separate contribution to a fund used for national and/or regional marketing efforts.
It's crucial to clarify how these fees are calculated, what they cover, and whether they can change in the future.
By asking these critical questions and dedicating the time to find clear, honest answers, you'll be well on your way to making a confident and informed decision about your entrepreneurial future.
Take the next step in your entrepreneurial journey by learning how the Ziebart franchise opportunity can provide the ideal foundation for your future.