How to Prepare for a Meeting with a Franchisor? Questions You Must Ask

The first meeting with a franchisor is a crucial step in the investment process. Proper preparation and asking the right franchise questions can decide about the success or failure of your future business. The goal of this meeting is not only to get to know the offer, but above all to verify the transparency of the network, its financial condition and the scope of support. Below we present a list of key questions you must ask in order to gain a full picture of the situation before you decide to sign a franchise agreement.

Franchisors who focus on long-term and fair cooperation, such as Rentabox24, will provide you with a complete disclosure document and encourage you to ask difficult franchise questions and to talk to existing partners. Transparency in financial and legal matters is the best indicator of a solid brand.

Key Questions About Profitability and Finances

Start with the most sensitive topic: money. An honest franchisor will not avoid concrete answers and, in an ideal situation, will provide you with financial data confirming the network’s profitability.

Questions about profitability:

• Franchise questions (Finances): What are the real occupancy rates for the longest-running locations and what is the average monthly revenue and operating cost per m²?
  
• Total costs: What is the total, realistic cost of launching the business (including equipment, licences and adaptation) and when can you expect a return on investment (ROI)?
  
• Fee structure: What are all the fees (initial, licence, marketing, technology) and is there a minimum licence fee independent of turnover?
  
• Bank cooperation: Does the franchisor have bank recommendations or ready business-plan templates that help in obtaining financing, and how much own capital is required?
  

Questions About Support and the Franchise Agreement

Even the best business model will not defend itself without solid support from the franchisor. You must understand what you actually receive in return for regular franchise fees.

Questions about support and the agreement:

• Operational support: What is the scope of technical, marketing and operational support (e.g. do I receive a ready-made 24/7 customer-service system, as with Rentabox24)?
  
• Territorial exclusivity: Does the franchise agreement guarantee me territorial exclusivity and how large is this area – can it change in the future?
  
• Termination of the agreement: What exactly are the terms and costs of terminating the franchise agreement, both from my side and from the franchisor’s side, and what penalties apply for breaching it?
  
• Innovation and technology: How often does the network introduce technological innovations and who bears the costs of their implementation and maintenance (e.g. costs of updating the Rentabox24 software)?
  

Always remember to ask for contacts to existing franchisees. They will give you the most realistic picture of the cooperation.

W-Questions About the Franchise

Which franchise questions are the most important for investment safety?

For investment safety, the key franchise questions concern the conditions for terminating the franchise agreement, in particular the allocation of costs and the guarantee of territorial exclusivity. You must also understand who is responsible for maintaining key technology and who bears the risk of its failure. 

Should I ask the franchisor to submit the franchise agreement for legal review?

Yes, you definitely should ask for a draft franchise agreement to be reviewed by an independent lawyer specialising in franchise law. An honest and transparent franchisor, such as Rentabox24, will provide a template of the agreement and encourage you to consult it. Never sign it under time pressure. 

Why must franchise questions also concern technology and automation?

In modern franchises such as self storage, franchise questions related to automation (e.g. unmanned model) are crucial, because technology directly affects cost optimisation and scalability. A lack of modern solutions in the franchise agreement may increase the project’s costs and reduce its profitability. 

Summary

Preparing and asking the right franchise questions is your best insurance policy. Be inquisitive and focus on the details of the franchise agreement. If you are looking for a partner who values transparency and innovation, such as Rentabox24, ask us for a detailed list of questions and disclosure documents.