Visiting Franchise Outlets in China: How to Interview Existing Franchisees Independently Before Signing

When choosing a franchise brand, a sales presentation only tells you what the franchisor wants you to see. Visiting outlets helps you understand what day-to-day operations actually demand. Existing franchisees’ experiences are valuable sources of evidence, but one person’s success or complaints should not be taken as representative of the entire brand. Before signing, plan your visits as an investigation with a defined sample, prepared questions and cross-checks—not as a tour followed by an immediate payment.

1. Obtain outlet information, then choose whom to visit yourself

China has specific regulations governing commercial franchising. Article 21 of the Regulations on the Administration of Commercial Franchising requires franchisors to provide prospective franchisees with the legally required information and the contract text in writing at least 30 days before the contract is concluded. The information listed in Article 22 includes the number and geographical distribution of existing franchisees in mainland China, along with a report assessing their business performance. The Measures for the Administration of Information Disclosure in Commercial Franchising set out further disclosure requirements. These materials can provide a starting point for selecting outlets to visit, but they do not mean that the franchisor must give you unrestricted access to every outlet or to other operators’ complete accounts.

First, ask the franchisor to clarify the date to which its outlet figures relate, which outlets are company-owned and which are franchised, which are still trading, and whether outlets being prepared for opening or no longer operating are included in its recruitment presentations. Company-owned outlets can help you observe standard procedures, but they are not a complete substitute for franchised outlets: staffing, resource allocation and responsibility for costs may differ.

Do not rely solely on showcase outlets chosen by the franchise sales team. Cross-check disclosure documents, publicly available outlet information and on-site findings when selecting your sample. Aim to cover outlets of different ages, in different trading locations and at different operating scales. An outlet with conditions similar to those of your proposed business is more useful than a flagship store in a distant city. If you find that an outlet has closed or changed brands, record its status and then check with the franchisor. Do not infer the reasons from a map listing alone.

2. Observe at different times, and do not equate customer traffic with profit

Before visiting, prepare a standard record sheet covering the date, time, weather, footfall nearby, staff numbers, queues, order preparation times and delivery collections. Where possible, observe both weekdays and weekends, and both busy and quiet periods, so that a one-off promotion is not mistaken for normal trading.

Focus on whether the operating model fits the time, money and effort you can commit. Does the owner need to be on site all day? How many roles need to work together during busy periods? Can service be maintained when the outlet is short-staffed? Does preparing the products depend on experienced employees? These questions often reveal more about operational demands than photographs of the décor or queues.

Do not extrapolate annual revenue directly from seating capacity, queue length or the number of orders placed in a particular hour. Delivery orders may involve discounts and platform fees, and turnover is not the same as the franchisee’s earnings. Even if an owner is willing to show screenshots of trading figures, clarify the period covered, how the figures are calculated and whether they coincide with an opening promotion.

Respect normal business operations during your visits. Do not photograph customers’ personal information, ask ordinary employees to disclose internal data or use your status as a prospective franchisee to pressure an owner into an interview. Sharing experience is a voluntary act of co-operation, not a legal obligation owed to you.

3. Ask about actual experiences, not just whether the business makes money

Before speaking to an owner, explain that you are assessing the franchise opportunity. Ask whether they can talk outside peak hours, and obtain permission to record the discussion or take notes. Questions about specific dates, events and outcomes are more likely to produce verifiable information than requests for general opinions.

You could ask about the following:

• Preparing to open: How did the actual preparation process differ from what was described before signing? Which tasks did the owner have to handle independently?
• Franchisor support: When did they last ask for help? Who responded, and how was the issue ultimately dealt with?
• Staff management: Which roles does the owner usually perform? Is it difficult to train new employees to work independently?
• Day-to-day co-ordination: How does the franchisor communicate and co-ordinate responses to stock shortages, system failures or changes to promotions?
• Lessons learnt: If they were choosing again, what is the one thing they would most want clarified before signing?

When you hear comments such as “the franchisor is excellent” or “they provide no support at all”, ask for specific examples. Also establish the interviewee’s relationship with the brand: do they help recruit franchisees, and might they receive payment for referrals? A referral incentive does not necessarily make their account untrue, but it should affect how you weigh their views.

When speaking to franchisees who have closed their outlets or left the network, distinguish between factors such as changes to lease arrangements, personal circumstances, business management and the franchisor’s fulfilment of its obligations. A single closure does not prove that the model has failed. Repeated reports of the same problems across several outlets, however, warrant further investigation.

4. Turn discrepancies into a list of questions and request written answers

After your visits, divide the information into three categories: facts you observed personally, statements made by interviewees and assumptions that still need checking. Do not turn an owner’s remark into a definitive conclusion, or pass unverified allegations on to other outlets.

Next, compare your visit notes against the disclosure materials and sample contract, point by point. For example, if the franchisor describes ongoing on-site support but the outlets you interview say they mainly receive remote assistance, ask whether support arrangements vary by region, stage of operation or fee package. Request clarification of the standards that would apply under your proposed contract.

The Regulations on the Administration of Commercial Franchising require information disclosed by franchisors to be truthful, accurate and complete. If you identify significant discrepancies, request an explanation and supporting documents. However, changes in an outlet’s status or an individual franchisee’s poor experience do not necessarily amount to a breach of disclosure rules, nor do they automatically create a right to a refund. Where important information may have been concealed or false statements made, seek professional advice on the legal implications in light of the evidence.

Finish with three concise documents: a table of the outlets sampled, an interview verification sheet and a list of questions awaiting the franchisor’s response. Practical takeaway: do not let the atmosphere of a visit or a limited-time offer rush you into signing before key discrepancies have been reasonably explained. The aim is not to find an outlet that “looks successful”, but to establish whether you can meet the real demands of running the business.