Doing the research

Talking to other franchisees

Sarah Stowe

The franchisor must provide you with the names and contact details of existing franchisees. Talking to other franchisees is a great opportunity to find out what running the business is really like, to be sure they’re painting a realistic picture.

“Check in with as many as possible,” says Peter Knight, a business and franchise accountant with Franchise Accounting & Tax. “But remember, no two businesses are identical, even when they’re part of the same franchise.”

A good first impression

Always make an appointment. 

“Don’t just phone or turn up and expect a franchisee to focus on your questions,” Greg Nathan, founder of the Franchise Relationships Institute says. “It’s also good practice to check whether they’re comfortable answering questions about their personal and business experience. Let them know you understand if there are some things they’d rather not talk about.” 

Build a trust

Don’t expect franchisees to open up right away. 

“This is a good sign,” Nathan says. “It’s good practice for them to be sure whom they’re talking to before sharing information that might be commercially sensitive. You can start to build trust by telling them something about yourself, how you got their name and details and who else you have spoken to so far. Following this with a bit about yourself and your work or business background will make them feel more at ease, and more inclined to reciprocate.”

Be prepared

Gather background information by looking at their Facebook page and other social media. The franchisor might also provide some facts. 

“During the conversation, stay relaxed, focused and take notes,” Nathan says. “A Zoom is preferable to a phone call but a face-to-face meeting is ideal. This may sound like a lot of work but these investigative conversations could be the best investment you’ll ever make.”

Put negative responses in context

Not all negative responses should be interpreted as red flags. 

“I’d be a bit suspicious of a franchisee who only had good things to say about their franchisor, their franchise network and their experience in building their business,” Nathan says. “It’s natural for franchisees to have a range of experiences and, if some come across as negative, this is the reality of business life.”

They can also provide opportunities to dig deeper. 

“For example, most franchisors will have made at least one decision that a franchisee didn’t agree with,” Nathan says. “This is good to know – and, more importantly, a chance to find out whether the franchisor consulted franchisees and how they managed any objections.”

It’s also good to know about the challenges the franchisee has worked through and how well they coped.

“If a franchisee is particularly negative about the franchise network, I’d try to find out why,” Nathan says. “You might say something like “You obviously feel very strongly about this – could you tell me a bit more about why this has been such a concern for you?”

However, Nathan does recommend paying attention to any negatives raised by two or more people.

“It’s a good idea to raise these with the franchisor,” he says. “There’s no need to mention anyone by name, but it is important to get both sides of the story.” ′

Five important questions

If you could ask a franchisee just five questions what should they be? Here are the ones Greg Nathan recommends.  

  1. How did you get involved in this business?
  2. What expectations did you have and are these being met? 
  3. Has anything happened to make you question the trustworthiness or competence of the leadership team?
  4. What do you like most about belonging to this franchise network?
  5. Knowing what you now know, would you still join the franchise. Why, or why not?”

LIGHTBULB MOMENT

Don’t be put off by negative comments – no franchise is perfect. Put them into context and consider how they apply to your own situation.