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Why Is It Important to Investigate a Franchise Before Entering a Business?

Why Is It Important to Investigate a Franchise Before Entering a Business?

By Franchise InformationJuly 14, 2022

Partnering with a nationwide franchise gives you the chance to be your own boss but still have the backing of a reputable company. In fact, that’s why you should start a franchise in the first place since there’s less risk than starting a business from scratch. But that doesn’t mean you should commit to a franchise without thoroughly investigating them. 

How do you investigate a franchise? Read on to learn why you should investigate a business, and how to gain information.

Why You Should Investigate a Franchise

investigating franchise business opportunities

Partnering with a franchise will give you the support of a larger, well-established corporation. But before you commit to a franchise, you need to make sure it’s the right fit. Start by asking the following questions:

Do I Align with their Values?

Make sure that you share the company’s passion and values. For instance, if you’re passionate about the environment, you’ll need to find a company that advertises a lot of green initiatives or other programs. Similarly, you may discover that certain financial policies are out of step with your values and lead you to look elsewhere.

How Much Money Will I Have to Invest?

Research and understand the  investment costs. As you learn more about the franchise, make sure you understand what you will have to invest including the following: 

  • A one-time franchising fee
  • Monthly royalties
  • Cost of supplies/equipment
  • Marketing fees 

Some of these fees are necessary when you invest in a franchise, but you’ll still want to compare the cost of each opportunity to ensure you know exactly what’s expected of you financially.

What Is the Company’s Reputation?

Does the franchisor have a positive reputation? After all, if you’re going to represent that brand, it’s important to know how that might impact your own public reputation. Chances are you’ll feel better about your investment if you align with a company with a positive public image.

What Expectations Will I Have to Meet?

What does the franchisor expect from the franchisee? Sometimes, there are specific deadlines or benchmarks that the franchising company expects its franchising locations to meet. You’ll need to decide whether these expectations are reasonable for you to meet.

What Is the Workplace Culture Like?

As a franchise owner, this job will be your life for at least the duration of the franchise agreement. What will your day-to-day life be like? Find out as much as you can about the workplace culture, including how they handle things like vacation time, medical expenses, and other core benefits. Is this a place you could see yourself working?

How to Investigate a Franchise

These questions are a good start, but how do you investigate a franchise? Here are some tips to help you learn as much as you can about the company before you sign a contract.

Read the Franchise Agreement

The franchise agreement serves as the contract between you and the franchisor. The company is obligated to disclose certain financial details as part of the agreement, and the agreement will also explain some of the fees and expectations listed above.

Talk to Other Franchisees

Visit other franchises in the area and speak to the operators. This will give you a better sense of what it would be like to partner with this franchise (or work in this industry) full-time. They may even be able to offer advice on the best way to break into the industry or share tips for getting started.

Attend a Discovery Day

After you complete an application, the franchisor will invite you for an interview and a “discovery day.” A discovery day allows you to learn more about the inner workings of the franchise and provides a better snapshot of what your time as a franchisee will be like.

Read Online Reviews

How do you investigate a franchise without leaving your house? You can always rely on online reviews. While these reviews obviously reflect the customers’ experience, they can provide you with some information about the company’s reputation, core values, and commitment to customer service.

The Freedom You Want, The Security You Need

By now, you likely understand why you should start a franchise. You get all of the freedom of owning your own business while benefiting from the security of a solid company. 

Why not give it a try? Start with the online search tools on You can use this free tool to find franchising opportunities in your area, which can put you on the path toward owning your own business.

About the Author

A Trusted Industry Leader Since 1995. Founded in 1995, was one of the first franchise recruitment websites in the world. Today, we continue to be the 'go to' place for people beginning their business opportunity search and the journey of franchise ownership as well as for those already involved in the world of franchising.
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