Understanding Franchisee Expectations for Finalizing Contract

Franchisee Expectations
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Franchising is a goldmine of opportunity for today’s entrepreneurs. With a few simple but prudent measures, one can reap a profit. Franchising is beneficial because it allows for individuality, and there is always an expanding business that fits one’s budget. The only disadvantage is that having too many options makes selecting the best extremely difficult. At times, it can be perplexing.

What can a Franchisee Expect from a Franchisor?

Each prospective franchisee has unique expectations of the franchisor they are considering. For the standard ones, the expectations set forth below are non-negotiable. As a prospective franchise buyer, keep the following points in mind.

Franchisor Due Diligience

It is prudent to seek out a franchise that conducts business professionally, as evidenced by the following touchpoints:

  1. Look out for Company Website
  2. Ask for a Registered Company Deed
  3. Ask for Advertising & Marketing Support
  4. Ask for Training Provision
  5. Seek Past Performance Record
  6. Evaluate Projected Growth & Support 
  7. Understand Services/Products Repository
  8. Request for Legal Disclosures

Franchisee Expectations: Cost Transparency

When considering purchasing a franchise, one of the expectations is financial transparency regarding the costs associated with starting and maintaining a business. When you visit a business’s website to inquire about pricing and interact with representatives, the business’s representatives should be proactive and forthcoming in providing you with all necessary information.

Given the investment size required to acquire a franchise, you must be confident in the opportunity. There should be no unexpected costs. It’s a good idea to contact existing franchisees and inquire about their upfront costs; this will indicate the company’s financial viability.

Franchise Territory Protection

This is critical; you do not want to open the franchise business you’ve always desired, only to discover that a similar franchise has been opened less than a kilometer away. This is certain to have a detrimental effect on the profitability of your business. As such, ascertain whether the franchise includes territory protection.

Franchise Client Service 

The scope of business support is vast, and it is frequently mentioned when discussing the franchise business model. As a result, you should anticipate your franchisor providing comprehensive business support as a franchisee. The company’s headquarters should assist the following areas:

  • Reply to technical inquiries
  • Resolve client complaints
  • Continued training
  • Provide legal assistance

Franchisee Expectations: Location Selection

Each franchisor has its business model, and the one with which you wish to affiliate may or may not have a real estate department. If they do, great; if not, they should be able to provide you with references for commercial real estate agents in your area.

A portion of the franchise fee is for the franchisor’s expertise in the field, which should include real estate. The franchise headquarters team should be able to assist you in determining a good location for your franchise.

Apart from interviewing the franchisor, you can find out if your franchisor delivered on the existing franchisee expectations. You should contact them to confirm and ascertain how the franchisor assisted them in locating a location. It’s natural to have these expectations of your franchisor, and you should speak with current franchisees to ascertain whether your prospective franchisor fulfilled these obligations under the franchise contract.

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