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![Franchisee Checklist – Assessing the Franchisor](https://static4.franchisedirect.ie/dims4/default/880f8b2/2147483647/strip/true/crop/1200x628+0+0/resize/900x471!/quality/95/?url=https%3A%2F%2Ffranchisedirect-40-prod-ops.s3.amazonaws.com%2F94%2F5e%2F79a85774a14142c1e07a856a2642%2Fcover2021-ca-9.jpg)
Franchisee Checklist – Assessing the Franchisor
A crucial step in researching a franchise system is analyzing the franchisor and franchise system you are interested in becoming part of.
Consider the questions below about the franchise you are considering buying.
The Franchisor's Company
- How long has the franchisor been in business?
- What business experience and qualifications do the franchise's directors and managers have?
- Have they or the company been involved in any litigation or court judgments? How were these cases settled?
- Is the franchisor on solid financial footing? Ask to see audited financial records for three years.
- Is the franchisor a subsidiary of another company, and if so whom? Is the parent company soundly financed? Ask to see their financial records as well.
- How particular is the franchisor when selecting franchisees? What selection criteria do they use?
The Franchise System
- How long has the company been franchising?
- Has the franchised business been thoroughly proven in practice? (Keep in mind newer franchises can be just as successful as older ones.)
- Is there a strong, distinctive trade name associated with the product or service?
- Are the products produced by a patented method or is the service based on an exclusive process?
- Is the product or service defendable (i.e., how vulnerable is it to imitation and/or competition)?
- What is the franchisor’s plans for expansion? How fast do they plan on growing? Is it possible that the company will overstretch its capabilities?
- How does the franchisor deal with failing units?
- Does the franchisor, and/or the parent company, operate any units of the franchise? If so, would they be in competition with you?
- If there are known competitors, does the franchise in question have any distinct advantage over them?
- What does the franchisor see for its future? Does it plan to enter new areas of business? What kind of innovations could be on the horizon?
![The franchisor’s plans for expansion](https://static4.franchisedirect.ie/dims4/default/553fefc/2147483647/strip/true/crop/878x585+0+0/resize/900x600!/quality/95/?url=https%3A%2F%2Ffranchisedirect-40-prod-ops.s3.amazonaws.com%2Fe7%2F7c%2Faf39039b6ab7721dd2d01ba66c24%2F2021-franchising21.jpg)
The franchisor’s plans for expansion
Other Questions About the Franchise
- Is there an awareness of the brand in the country or state in which you want to locate it?
- If the franchise comes from another country, how successful has it been in its own and any other markets it's operated in?
- Are the franchise's prices competitive and can this competitiveness be maintained?
- Does the product or service have long-term market appeal, or could it be a passing fad or fashion?
- Can you interview some of the existing franchisees?