Top Characteristics to Look for in a Franchisor

So you are looking to start a business through franchising – congratulations. Whatever your industry, you must take some of the tried and true vetting exercises that separate the good franchisors from the bad ones.

characteristics look for in franchisor

What kind of support do they give to their franchisees?

Despite the individual talents of any franchisee, he or she will need the support of the corporate structure in order to succeed. A franchisor also has the ability to speed up success through more robust training programs. Does the company offer these, or are you expected to understand how to run the business as soon as you buy it?

How is the ongoing support after you set up shop? Is there a hotline that you can call with problems? What if the company has a problem from the top down, such as a lag in the supply chain? Does the company have a contingency plan for franchisees, or are you expected to figure out everything on your own in this case?


Are there a bunch of hidden costs associated with buying a franchise with this company?

In the initial purchase of a franchise, there will always be upfront costs and ongoing costs. If you are taking on the brand of a company that has already been built, you should expect to pay somewhat of a premium. However, there is no reason there should be any hidden costs, no matter how famous or well-organized a franchise may be.

You should look for a franchisor that lists all of his costs upfront. For instance, there should not be any hidden costs for training or hotline support. You should have control over your supply chain so that if you can get a lower price in your area, your storefront can take advantage of it. Although you are working in a group, remember that hidden costs are usually individualized. They can stunt your success, so they should be avoided whenever possible.


What do the numbers look like after you begin making a profit with your franchise?

After you have success, will you be responsible for added fees or higher percentage payments to the corporate backbone? It is one thing to have a good revenue streams – it is quite another to be able to keep it. You need to understand how a business will treat you when you are successful, because many of them try to leech off their winners.

Take the time to ask successful franchisees within a brand structure if they are being treated with the respect they deserve. Once you put in the work to create a successful storefront, you should be heralded as a leader within the structure, not taken advantage of. Ask as many questions as you need to until you are certain that the franchisor knows how to deal with successful franchisees.


If you are looking into buying a franchise, take the tips above into account and contact National Franchise Resales to talk with us about buying an existing franchise opportunity in your local area.