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Questions To Ask Before Joining A Coffee Franchise

Thursday, February 06, 2014

There are three main groups of people you should talk to before you consider signing up to a coffee franchise opportunity. First, discuss with your friends and family your skills and your weaknesses. Ask them to be completely honest with you, because when you’re planning to go into a new business you don’t want to do so under false assumptions.

Be careful though, because if these people do not run their own business they are likely to be cautious and point out all the risks to you!  Similarly they may not understand the coffee opportunity if they don't like coffee!  But nevertheless ask them their thoughts.

The franchisor should also help you decide if you are suited to a franchise, and importantly their franchise.  They know the skills required, and should be honest with you if they don't think you have them.  

The next two groups you’ll need to speak to are the franchisor themselves and if possible some existing franchisees. This will give you a far better understanding of what’s expected of you as a franchise holder and how the agreement will work. The details of any coffee franchise opportunities might not be immediately apparently from online searches, and the only way you’ll be able to find out the information is by performing thorough research.

Don’t feel like you’re pestering anyone by asking the franchisor as many questions as you want to. They will be used to it from others, and as they will want you to join they will be happy to dispel any worries you have, and clarify confusing details.

Make a list of your questions so that you don’t forget anything.

The basic areas you might want to cover include:

  • Financial responsibilities and ongoing costs

  • Marketing support provided to you at launch and ongoing

  • Legal - what is the relationship between you and them, and are they happy to let you see the agreement early in the process?

  • Training and support it is important you understand what this involves at the outset and on an ongoing basis

  • Operations - is there a team behind the model? - to help with equipment, products, training, help you in the future.

  • Product supply - you should expect the franchisor to help you with this area.  

There are other things you might want to check as well which will be specific to the coffee franchise opportunities you’re considering.

Questions to ask the franchisor:

  1. What sets this model apart? What is different about this particular coffee franchise opportunity? Is the demand for the product proven?

  2. How much time does it take between signing up to the agreement and opening my franchise?

  3. Is there any guarantees of profit/turnover?

  4. How long is the contract for, and is there the option of renewal when it comes to an end?

  5. Should I choose to leave the franchise before the end of the contract, what are my options? Are there many instances of this happening?

  6. How many franchises do you currently have? How rapidly is the company growing?

  7. How do you determine territories, and are my rights exclusive?

  8. If I wanted to, could I expand into other local territories?

  9. How much choice do I have about products sold, and what is the process for ordering those?

  10. Who sets the price for products? If it isn’t set are there recommended prices?

  11. How much marketing do you do, and what is expected of me in terms of promotion?

Obviously some of these questions might have straightforward answers, while others will be more complicated. These might lead to having to ask further questions to get complete answers. If you’re not entirely satisfied, find out more information.


Questions to ask a franchisee

Source: confessionsofacoffeejunkie.wordpress.com

Most franchisors will ask you to meet with them for an informal no obligation discussion about the franchise, as well as your goals and skills, before you speak to a franchisee. This is actually good practice because otherwise you could waste your time and the franchisee's when in actual fact the business isn't right for you or you for it.  But at some point it’s a good idea to speak to a franchisee about their business. Always ask whether it’s okay to discuss the franchise, and maybe arrange a time to sit down and chat or schedule a phone call. Remember that while the franchisor will be happy to talk to you about the scheme because they’re trying to sell it, franchisees won’t necessary be so pleased – especially if you interrupt them at work. Be polite and if they’re too busy don’t pester them.

Good franchisors will also offer to arrange for you to visit a franchisee while they work.

Once you’ve arranged to speak to a franchisee, compile a short list of questions so you don’t take up more of their time than is necessary.

  1. How many hours do you work per week? Is this what you expected?

  2. Do you work on evenings or weekends to boost your income?

  3. How good is the training offered, and what is the ongoing support like?

  4. What did you do before you bought into your franchise?

  5. What is the worst aspect of the role/business?

There might be more things you can think to ask, but this should be a good starting point. It might be useful to consider what you expect the answers to be, and think of follow up questions as well. It’s easier to ask everything at once than to constantly have to approach people as and when you think of new things to ask.


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