Before you spend your life savings buying a franchise, first do some

serious research. Here are some pointers you may want to make

or consider as a check list as your own research:


  1. First and foremost check to see how professional their training is and if it covers aspects that you are not familiar with an example: how to do basic accounting, how to manage staff, do they provide customer service training for your frontline staff, is their training sufficiently covering all aspects for yourself and your staff;
  2. If you are spending hundreds of thousands or even millions on a franchise, be sure to spend a few thousand with a good lawyer who can review the franchise agreement so you know your rights as a Franchisee, it will be worth every penny in the long run;
  3. Be sure that your Franchisor is going to be there to empower you rather than make it their life’s mission to disempower you and see you fail. The reason being, so they can sell the branch again and charge the next person franchise fees to line their own pockets. Check they have a high or low turn over of franchisees;
  4. Ask how much of your cash will be tied up in stock and then times that by one and a half to find out the real value of what will be tied up in stock;
    These are 4 out of 32 points to consider before you buy a franchise
  5. How many suppliers do you have to deal with? Dealing with excessive suppliers could be draining your time on suppliers rather than focussing on your business;
  6. How many stock lines are there that you will have to manage? This could be draining on your cashflow;
  7. Remember you also have to pay a lease deposit over and above everything;
  8. Find out what are the electricity, water, and any other costs before you sign a lease. Falling under different municipalities can make a big difference to your operational costs;
  9. Ask what are all the additional costs over and above the franchise when purchasing and then times that by 1.5 as they tend to leave out the important information in this regard;
  10. How does the Franchisor treat their own staff? This will be an indication of how they will treat you and the staff you employ;
  11. Understand and be sure of the seasonality i.e. busy times and quiet times and make provision for quiet times;
  12. What is the look and feel of the Head Office itself?
  13. If they run their franchise owners down, imagine what they will do to you. And don’t think “it won’t happen to me” because that’s the first sign that it will;
  14. What is the Franchisor’s highest value? If it is money, then do not expect to be treated well as a Franchisee;
  15. How many branches do they have compared to other franchises over a specific period of time? This will determine their success rate;
  16. Has the value of starting a new franchise increased or decreased over the years?
  17. What does the franchise do in return for your monthly franchise marketing fee? Make sure it is worthwhile;
  18. If your reason to leave your job was that you want to work for yourself – remember that by owning a franchise you still have a boss and possibly a bad boss;
  19. Ensure that the Head Office is well-staffed and competent to provide you with the necessary support;
  20. Be humble enough to understand that if previous franchise owner/s struggled, there could’ve been a good reason for example bad training or bad Management or maybe they just had a bad run;
  21. Ensure that the Franchise keeps up to date with trends, technology and good practices across the board;
  22. If good practices or legalities are only in the Franchisors best interests – run as fast as you can; There is no intention to ever have your best interests at heart;
  23. Ensure the rules are the same for all stores. i.e. not contradictory;
  24. Ask current and previous franchise owners what type of feedback they received in their audits and how often audits will be done in your store? Was it all negative? Or was it a balanced or helpful audit rather than one that is continuously critical;
  25. Find out what type of questions are asked in the audit;
  26. Ensure that the Franchisor practices what they preach across the board;
  27. Is the Franchisor forgiving when you make human errors, or will they hold it against you throughout your tenure and make it their personal mission to make your life difficult;
  28. Check the franchise agreement in terms of reselling and ask questions around this with your Franchisor for example: what are the potential issues to stop the sale should you want to sell one day;
  29. If they do not have a documented guideline of processes and procedures to be followed, they will consistently contradict themselves;
  30. Does the Franchisor have integrity? And can they look you in the eye when they talk to you?;
  31. If the Franchisor tries to give you advice about the branch you are buying, yet has never visited the branch in a year or more, then honestly how much do they know about the dynamics, environment, staff, clients of that specific branch?;
  32. When Franchisors run specials, find out who bears the cost of these specials and how often they have specials? Some Franchisors will create a special of ‘buy one get one free’ – and you as the Franchisee will bear the cost of whatever is being offered free – thus cutting into your profits;