How to interview franchisees before buying a franchise

Speaking to people who already run a franchise helps you discover how the sales pitch translates into day-to-day operations. But relying solely on testimonials selected by the franchise development team can give you an incomplete picture. Experiences across a franchise network vary according to location, length of operation and management. Useful interviews require independently chosen contacts, comparable questions and care in distinguishing facts from opinions and exceptional circumstances.

1. Use the COF list to choose your contacts

Brazil’s Law No. 13,966/2019, known as the Franchise Law, requires the Franchise Disclosure Document (Circular de Oferta de Franquia, or COF) to contain a complete list of the network’s franchisees, sub-franchisees or sub-franchisors, as well as those who have left in the past 24 months, including their names, addresses and telephone numbers. This requirement appears in Article 2, item X.

The list allows you to approach people beyond those selected by the franchisor. Do not restrict yourself to the outlet presented as a success story: choose businesses with characteristics similar to your proposed operation, alongside others that offer contrasting perspectives.

Put together a selection that includes:

• Recently opened outlets, whose operators still remember the challenges of getting started.
• Longer-established businesses that have been through different stages of trading.
• Franchisees in towns, cities and trading locations comparable to those you are considering.
• People who have left the network, to understand the circumstances of their departure.

If contact details are incorrect or incomplete, request an update in writing. An unanswered call does not prove anything is wrong, but recurring difficulties warrant clarification before you proceed.

The COF must be provided at least ten days before you sign a contract or preliminary agreement, or pay any fee to the franchisor or a person or company connected with it. This is a minimum interval, not a deadline for completing your assessment.

2. Ask questions that reveal concrete situations

Introduce yourself as a prospective franchisee, explain your purpose and arrange a convenient time. Avoid approaching the operator during their busiest trading hours. The legal obligation to provide the list rests with the franchisor; it does not mean that each franchisee is obliged to give an interview or share their figures.

Use a consistent set of questions to make comparisons possible, but leave room for spontaneous answers:

• Expectations and reality: what differed from what you had imagined before joining?
• Opening: which costs or tasks were not sufficiently clear at the planning stage?
• Day-to-day operations: which activities most need your personal involvement, and how much can you delegate?
• Problems: describe a recent difficulty and explain how it was handled.
• Working relationship: how are disagreements with the franchisor dealt with in practice?
• Decision-making: what would you investigate more thoroughly if you were buying today?

Replace general questions such as “Is the support good?” with requests for examples: what was the request, when was it made, who responded and what was the outcome? This reduces ambiguity without turning the conversation into an interrogation.

When discussing financial performance, clarify what terms mean. “There was money left over” can mean different things depending on whether the person takes account of taxes, loan repayments and the owner’s remuneration. Do not treat an informal answer as a set of financial statements or pressure the interviewee to disclose confidential information.

3. Listen to former franchisees without assuming why they left

Someone may leave because of disappointing results, disputes, a change in personal circumstances or the sale of the business. Do not assume any of these explanations before speaking to them. It is also important to distinguish between someone who closed an outlet and someone who transferred a business that was still trading.

Ask when they joined and left, what type of outlet they operated and which factors influenced their decision. Then try to establish the sequence of events: when the difficulty arose, what steps were taken and what remained unresolved.

One particularly useful question is: “What should a prospective franchisee check to avoid facing the same problem?” This turns their experience into specific points to investigate.

Record reported facts separately from interpretations. Criticism deserves attention, but does not, on its own, prove a widespread failing. Equally, a positive account does not guarantee that your future outlet will achieve the same results. If you want to record the conversation, ask permission; do not share accounts that identify the speaker without their consent.

4. Turn the accounts into decision-making criteria

Create a table covering the outlet’s profile, the period being discussed, the problem mentioned, the example given and any clarification still needed. Compare similar businesses and consider whether each account describes a current situation or a practice that may since have changed.

Look for patterns, rather than taking a vote between satisfied and dissatisfied franchisees. A recurring difficulty in comparable businesses deserves investigation, even if other interviewees have not encountered it.

Raise discrepancies with the franchisor without unnecessarily identifying the people you have spoken to. Request explanations and documents that allow you to check the response against the COF and the contract. Significant issues should be assessed with a solicitor or accountant, depending on their nature.

In practice: before making a commitment, have an independently selected list of contacts, a consistent set of questions and a record of the concerns you have resolved. If an essential question remains unanswered, investigate further rather than deciding solely on the basis of testimonials.