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Six critical questions to ask a franchisor

Know which questions to ask a franchisor
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If you’re finally getting a franchise in 2011,  franchise guru Armando “Butz” Bartolome gives a heads up to the aspiring franchisees about critical questions to ask a franchisor.


Q: In getting a franchise, what are the most important questions to ask a franchisor?

A: First and foremost its is important that an applicant gets to meet the franchisor. Though most often the first liner will be the franchise officer or a staff designated to handle inquiries.  [Learn how to tell the right franchise partner here]

The main reason for meeting the franchisor is to gauge whether he or she has the passion and commitment in making the brand and business grow; aside from this it is also gauging whether the applicant and the franchisor will go a long way in the franchise relationship.

On the questions, the first is asking the franchisor’s short and long term plan for the business; has he or she made any and written plan. Most franchisors do have goals to achieve.

Knowing and understanding from the franchisor will make an applicant gain confidence; the second is the attitude of the franchisor towards having competitors. Most businesses do have competition. What kind of disposition does he or she have towards competition? What edge or niche does the business have over competition? [See six tips on franchising your biz here]

The third question is to find out when did he or she begin the business? How did it come about? When did he or she think of franchising; is there a model or prototype which was the basis for franchising? In franchising, it is based on the success of a model or prototype. It is where the profitability as well as market acceptance is based.

The fourth question is the growth of company vis-à-vis franchise branches. How many branches does he or she maintain? Is there a ratio which is observed? This is important primarily to see if the franchisor is active I operating company-owned branches. Most franchisors use the ratio of having 25 percent of company-owned while some would prefer having 1:1.

However be wary if the franchisor has only one company-owned and the rest are all franchised. Maintain a distance from such.

And finally find out if the franchisor is the main owner or has other arrangements. Under such instance if the franchisor is not the owner, he or she may have a management agreement with the original owners. [See top franchise ideas here]

Armando "Butz" O. Bartolome is currently President of GMB Franchise Developers, the pioneer franchise development company in the country and is behind the growth and expansion of over 200 local companies. You may reach him at franchiseconsultants@gmail.com or post your franchising how-to questions here.

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