Franchise questions to ask before buying
The most profitable elder care businesses are those that have a proven business model and track record, a strong brand, follow the Care Quality Commission’s (CQC’s) guidelines and those which offer a wide portfolio of services in the home care industry. But while this is important to know, there are other factors that you need to consider. These include asking your prospective franchisor the following questions on your journey ahead.
How do you stand out from the competition? – As a reputable home health care franchise, you need to ask your franchisor what makes them stand out from the crowd. What has helped them earn their reputation in the industry? Is it the vast portfolio of services offered, the attention to detail, pairing clients with similarly minded caregivers or is it technological advancements that make tracking each service more convenient? Perhaps it is a combination of all of these and it’s something worth considering.
What do you look for in new franchisees? – Furthermore, you should ask the franchisor by which criteria they select their new franchisees. In some cases, prior experience is not necessary whereas in others, having business, communication, sales, health care or other skills are a must. Therefore, you need to know if you’re a right fit for the franchisor by exploring your own strengths against their criteria for selection.
Do I get an exclusive territory? – A caregiver business licence granted to you by a franchisor can also include aspects such as an exclusive, geographically defined territory. Operating within such a territory often means that you will not be competing with existing franchisees for business. Instead, you will have your own location to work within and your geographical area’s population to serve. However, there are some cases where exclusive territory rights are not granted and your competition is greater. This is why it’s worth asking this question.
What is the total investment cost? – Further to the above, you need to have a crystal clear idea of what your overall costs will be – both initially and on an ongoing basis. This means your franchisor needs to be upfront with you regarding the initial investment and royalty payments as well as other monthly costs associated with running a business such as insurance, set up, rent, equipment, staffing costs, salaries, etc.
Is financial assistance provided? – Financial assistance is another crucial part of your investment journey. While you may have some funding saved up, in many cases, prospective franchisees will require help from a lender. Some franchisors have established relationships with lenders, who can lend up to 70% of the required start up capital. However, other franchisors will expect you to source the funds on your own. So you need to be sure where you stand.
What kind of training and support is offered? – Training and ongoing support are two sides of the same coin. They are essential in helping you establish your business in terms of the framework and model that the franchisor has created. The more thorough the training, the better prepared you will be for the years of operations that lie ahead. The same is true for ongoing support. You need to be sure that you can lean on your support network to get answers to questions when you need them and for general advice.
Can I speak to current franchisees? – Speaking to current franchisees is an excellent way to get a feel for how satisfied the overall network is with the support the network receives from the franchisor. If a franchisor is unwilling to let you speak to existing franchisees, you should be cautious. Usually, discussions with current franchisees happen after Discovery Day at a franchise business but this will vary from provider to provider.
What are daily operations like? – Finally, ask the franchisor what day-to-day running of the business will be like. Ask what you should expect on a regular basis and what is to be considered odd or unusual. Then, evaluate yourself against these requirements and see whether you fit the bill and whether you can handle these responsibilities willingly and over the long term.
What are the four main factors to consider when selecting a franchise?
When it comes to primary factors to consider when selecting a franchise, you need to think about the industry you’d like to go into, the associated costs, the success and track record of the business model as well as the levels of training and ongoing support provided.