Jason Murphy is a Melbourne-based economist who publishes the blog Thomas The Think Engine, where he talks all sorts of economics, and after reading his article last week I wanted to ask him a few franchising-related questions.

His piece, “ The truth about running a franchise”, looks into what’s actually involved in buying and operating a franchise: useful, timely and relevant for all prospective franchisees.

Here’s what Murphy had to say:

Is it [franchising] a scam? Or is it a free pass for success?

It’s not a scam or a free pass. But if you buy a franchise thinking it is a free pass to success, your experience is going to be tough. You might end up seeing it as a scam!  

What should prospective franchisees do when they’re in the phase of short-listing franchises to buy?

Don’t get excited by just one franchise. Don’t buy just because you like their burgers or their logo, or because one franchisee you know is making big bucks. Making a short list should take a long time.

What constitutes as sufficient due diligence?

When you’re bored of doing due diligence, you’re 10 per cent of the way through the due diligence you need to do. If you’re going to work 50 hours a week in a franchise for five years, doing a few months of 50 hour weeks of due diligence is nothing. 

Is franchising truly a gateway to financial success?

Only if you have that killer combination of luck and skill.

Who wins out in the franchisor, franchisee relationship?

Too often the franchisor. If they’re pushing franchises on you hard, step back. Ask yourself why they need such a strong sales job? A good franchisor should be doing due diligence on you too.

Follow Murphy on Twitter at his handle: @jasemurphy.