What to Ask a Franchisor

Start your own office support business from your own home with the eDivert network.
Video

eDivert

  Opportunities:
In the UK
  Business Type:
Franchise
  Minimum Investment:
£5,400
  Training Provided:
Yes
  Home-based:
Yes
  Part time:
Yes
  BFA Membership:
Member - Provisional

Below, we tell you which questions you should ask a franchisor when you are looking into buying a franchise.

So you have decided to start your own business. How exciting!

But what are you going to do? Have you decided on the industry you want to be in? Where should you start once you know?

Many people recognise the time they can save and the value of the support that they will receive when buying into a franchise. So how you do find out which franchise is for you?

We will give you an overview of the types of question to ask any franchisor to find the right franchise for you, illustrated with examples on how the eDivert franchise would answer these.

The eDivert franchise is a franchise that can be started from your desk at home. The types of services that we offer include any type of business support services, from telephone answering to email marketing, to social media management and telemarketing.

Except for industry, the initial investment often plays a big factor in people’s decision. However, it is important to compare this with what you can achieve with the business and compare it with what you will receive from the franchisor. So which questions to ask any franchisor to get a good feel of the franchise:

What will it cost?

What is the initial investment to buy into the franchise?

  • What will I receive for that?
  • Will I own a geographical region?

For example, at eDivert, you will not buy into a geographical region. The advantage of this is that you can move house and keep your franchise without it affecting anything. Instead we use our CRM system to show which prospects and clients belong to which franchisee, to ensure franchisees do not compete with each other.

Any franchise usually charges an ongoing royalty fee on a monthly basis to provide you with ongoing support and to continue to market the brand. So you would like to ask the franchisor the following:

What is the ongoing royalty fee to pay?

  • Is this a fixed amount or a percentage?
  • If it is a percentage, is this calculated over the turnover or over the profits?
  • What will I receive in return for the royalty fee, what is included?
  • Will there be any other ongoing fees to pay to the franchisee? For example, some franchisors charge separately for a marketing fund.
  • Will the percentage of the royalty fee reduce when I hit a certain level or turnover?

At eDivert for example, we charge one royalty fee. We don’t charge separately for a marketing fund.

Training and Marketing

Training and marketing materials are a big part of buying into a franchise. The fact that you buy into an existing business model means that you don’t have to reinvent the wheel. The franchisor will give you access to their knowhow, which will save you a lot of time and money that is usually spent on market research, learning what works for your type of business and the development of marketing strategies and marketing tools. Typical questions you can ask the franchisor are:

How does the training and marketing work?

  • Will I need to travel for the training or is it online?
  • Which subjects can I expect to be trained on?
  • Which marketing materials will I receive as part of my initial investment and for which marketing materials will I need to pay separately?
  • Do I need to find all my customers myself, or are you providing some level of support, leads or customers?

At eDivert, we are a big fan of remote working and we like to make the most of cloud-based systems. This shows in how we do our training, how we do our marketing and how we work with our customers. But it also shows in how we work with our franchisees. You are more than welcome to meet us in person, however if you prefer to join us and do your training online, then this is fine too!

Setting up

Every franchise is different and for different industries, different business models work. In terms of the set-up of your business, you can ask the franchisor the following questions:

  • Will I set my business up as a limited company, as a sole trader or something else?
  • Will I be VAT registered?
  • Will I be invoicing my customers directly, or does this go through head office?

From experience we know that for an eDivert franchise, you are best of to incorporate as a limited company and register for VAT from the beginning. If you would like to understand why, feel free to contact us to ask this question.

More information

Setting up and growing your own business, even when it is a franchise, is a long-term project. It is therefore important that you know what you are getting into. So it is really important that the franchisor you are speaking to is transparent and open about how the franchise works. A franchisor should be able to give you lots of information for you to make an informed decision.

Don’t hesitate to ask your franchisor for the following before making your decision:

  • Financial projections for the first 3 years.
  • Several chats over the phone with the franchisor to answer all questions that you may have.
  • A draft copy of the franchise agreement, so you can read through it and perhaps even have it checked by a solicitor before signing.
  • A chat with one or two existing franchisees, to learn about their experience.
  • You may want to attend a Discovery Day to meet the franchisor and some of their franchisees in person.

At eDivert, we find that being transparent with our potential franchisees means that we recruit the best people to join our network. We are happy to provide you with any of the above and you can always call us to ask any question.

Good luck with finding the franchise that is right for you!

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