Whether you are considering investing a few thousand or a small fortune into a professional services franchise, you need to be well informed. You may never have all the information you want, but you can have the information you need if you get clarity on the following list of questions:
- How much do I need to invest in the professional services franchise to get ramped up (considering initial franchise fees, training costs (including travel, lodging and meals), royalties owing for three to six months, equipment and supplies, licensure, as well as office rent and overhead)?
- Realistically, how much can I make operating the professional services franchise business (net of ongoing royalties and ordinary and necessary expenses)?
- Does my current skill set, education and experience translate well to the professional services franchise I am considering?
- To what extent do I feel as if I have a reasonable understanding of professional services franchise I am considering?
- In the short run, how many hours will I need to commit to effectively run the professional services franchise? In the long run, can I take advantage of economies of scale to grow the financial potential?
- How long is the initial franchise term and what will it cost to renew the franchise rights?
- How long has the franchisor been in business and to what extent do the leaders of the franchised business have experience working in this particular business?
- How will owning this particular professional service franchise affect my stature in the business community in which I operate?
- Are there any products or services I must buy from the franchisor? If yes, then how are they supplied and how much do they cost?
- What are the terms and conditions under which the franchise relationship can be terminated (or renewed), and how many franchisees (and why) have left the system during the past few years?
- What is the financial condition of the franchisor and any associated business operations?
- What are the potential long-term prospects of the professional services franchise? Is there the potential that the entire system could be purchased by a larger entity? Is there the potential that the death or disability of the leaders of the professional services franchise could impair the potential?
It is important to note, this is not an exhaustive list of questions you should consider asking. Answers to these questions will uncover other lines of questions you should pursue. Nevertheless, this provides a good start.