{"id":9202,"date":"2018-07-02T11:43:27","date_gmt":"2018-07-02T15:43:27","guid":{"rendered":"https:\/\/www2.franchisegator.com\/articles\/?p=9202"},"modified":"2022-08-04T17:02:39","modified_gmt":"2022-08-04T21:02:39","slug":"do-before-interviewing-franchisor-12714","status":"publish","type":"post","link":"https:\/\/www.franchisegator.com\/articles\/do-before-interviewing-franchisor-12714\/","title":{"rendered":"What Franchisees Need to Do Before Interviewing with a Franchisor"},"content":{"rendered":"

Franchisees who are serious about buying a franchise already know that they\u2019ll need to undergo an interview<\/a> with a franchisor before they can sign the franchise agreement and make the investment. Much like any interview, franchisees know they can\u2019t walk in unprepared. They have to do their homework in advance and that typically means being ready to answer questions that the franchisor will have about them as well as ask their own questions about the franchise. <\/p>\n

Beyond asking questions about one another\u2019s backgrounds and what a typical day at a franchise looks like, what else needs to happen during the interview? What other topics should you discuss together? How can you come across as competent and ready to buy the franchise and take on a role of a lifetime? Here are a few other areas of due diligence you can prepare for outside of the Q&A.<\/p>\n

Have a thorough understanding of challenges in the industry<\/h2>\n

Your franchise investment, ideally, should be in an industry you have researched in-depth. You might even have experience working in it, or a passion for its offerings and services. Beyond focusing on all the good things, you should also be familiar with challenges facing franchise owners<\/a> and in the industry in general. <\/p>\n

For example, consider the doughnut chain Dunkin\u2019 Donuts. It\u2019s a familiar brand name with a sizeable consumer base that has carved out a space in the breakfast world. But, consumer tastes are constantly shifting elements. Food trends and even health issues can lead to less of a demand for the product which could prove to present issues to a franchisee looking to invest in its franchise. You don\u2019t necessarily need to have an immediate answer as to how you can address potential issues, but you should be well-versed in the industry\u2019s existing challenges. <\/p>\n

Receive a copy of and read the Franchise Disclosure Document<\/h2>\n

By now, you should have a copy of the franchisor\u2019s Franchise Disclosure Document (FDD) which potential franchisees generally receive after the franchisor has received their application and is considering it. Do not, under any circumstance, sign contracts or pay money to the franchisor before you have received this document. <\/p>\n

While key portions<\/a> of the FDD\u2019s 23 items are outlined on the Federal Trade Commission\u2019s website, don\u2019t assume that you can waltz into your interview after skimming the copy or relying on what you see online to get you through. Read your copy carefully and speak with a trusted legal professional or advisor if there\u2019s an item you don\u2019t understand.<\/p>\n

Analyze your financial situation<\/h2>\n

Many entrepreneurs start their own business based off an original product or service they can offer the public that fulfills their needs. As such, there are several avenues of funding available for them like venture capital or grants. Franchises operate a little differently when it comes to finding financing options, so it\u2019s a good idea to look at your finances and see if you have more than the bare minimum to cover the business expenses. Make an effort to double your numbers before interviewing with the franchisor. The FDD states that most franchisors calculate three months\u2019 worth of expenses<\/a>, but entrepreneurship is always risky and prone to unexpected costs. Aim for six months, instead.<\/p>\n

Meet with current franchisees<\/h2>\n

Item 20 in the FDD includes a section about the contact information for current and former franchisees. Try to contact both types and see if you can meet up and talk together. By asking questions to existing franchisees, you\u2019ll get a better idea of what being in the business is like and their overall satisfaction in working with the franchisor. Keep in mind that previous owners may not be able to speak with you if they signed a confidentiality agreement. However, if they did not, you may be able to explore more through a frank discussion together as to why they left and any issues they had with their franchise.<\/p>\n

Consult a legal professional<\/h2>\n

I can\u2019t legally tell you what the best decision to make is as a franchise owner. Even if you feel comfortable with all of the research you\u2019ve done and meetings you\u2019ve had, it\u2019s always a good idea to work alongside a legal professional before signing the dotted line of an agreement. They can assist you with any questions you may have and help you make sense of any other concerns.<\/p>\n","protected":false},"excerpt":{"rendered":"

Franchisees who are serious about buying a franchise already know that they\u2019ll need to undergo an interview with a franchisor before they can sign the franchise agreement and make the investment. Much like any interview, franchisees know they can\u2019t walk in unprepared. They have to do their homework in advance and that typically means being … What Franchisees Need to Do Before Interviewing with a Franchisor<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":9203,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[],"class_list":["post-9202","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-for-starters"],"yoast_head":"\nWhat Franchisees Need to Do Before Interviewing with a Franchisor - Franchising Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.franchisegator.com\/articles\/do-before-interviewing-franchisor-12714\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What Franchisees Need to Do Before Interviewing with a Franchisor - 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