Buying a franchise: Talk to current and former franchisees

When you buy a franchise, you are also choosing a network and a way of working. A presentation from the franchisor may show its ambitions, but conversations with current and former franchisees can reveal how the relationship works in practice. Treat these reference conversations as a separate part of your pre-purchase due diligence – not as a reassuring endorsement of a decision you have already made.

1. Choose whom you speak to

Ask the franchisor to put you in touch with franchisees with a range of experiences: someone relatively new, someone well established, and someone running a unit with a customer base similar to the one you expect to serve. Also ask to speak to someone who has left the network.

A hand-picked referee may be both honest and helpful, but their experience is not necessarily representative. Supplement these conversations with people you find yourself, for example through the network’s public directory of locations. Respect anyone who does not wish to take part or is not permitted to share certain information.

Ask the franchisor why those particular people were suggested. Do they have special roles as mentors, operate several units, or benefit from an unusually strong local market? This does not make their accounts less credible, but it affects how directly their experience applies to your own situation.

Arrange conversations in advance, ideally without the franchisor present. Explain that your aim is to understand day-to-day life and assess whether the franchise is right for you – not to collect confidential documents or find fault.

2. Ask the same questions about day-to-day life

Using a consistent set of questions makes it easier to compare answers. Start with open questions, then ask for specific examples. Asking ‘Are you happy with it?’ rarely provides as much insight as ‘When did the relationship last work really well, and what happened?’

For example, you could ask:

• What does a typical working week look like for you as an owner?
• Which tasks take up more time than you expected before buying?
• What experience or personal quality has mattered most for you?
• How are franchisees’ suggestions and criticism received?
• Can you describe a disagreement and how it was handled?
• How do franchisees help one another across different units?
• What would you investigate more thoroughly if you were choosing again?
• Would you make the same choice today – and why?

Ask people to distinguish between the start-up period and normal operations. A demanding launch does not necessarily reflect working life once the business is established. Equally, an experienced owner’s manageable routine may depend on systems and staff you do not yet have.

Also ask whether you can visit the unit at an agreed time. A visit can give you a clearer sense of the tasks and pace of work, but it is still only a snapshot. Avoid disrupting customers and staff.

3. Understand your position under Danish law

Denmark has no specific franchise legislation, no franchise-specific registration scheme and no statutory requirement to provide a standardised disclosure document before an agreement is signed. You therefore cannot expect an information pack approved by a public authority to give you a complete picture of the network.

Instead, franchise agreements are governed by the Danish Contracts Act and general principles of contract law. Section 36 of the Contracts Act allows unreasonable contractual terms to be amended or set aside, but it is no substitute for thorough due diligence before signing. The Danish Marketing Practices Act and Competition Act may also be relevant.

The absence of specific disclosure requirements does not mean that a franchisor is free to mislead you. Depending on the circumstances, general rules on good-faith disclosure obligations and inaccurate information may affect liability or the validity of the agreement. A lawyer should assess the particular case.

Nor does being a prospective buyer alone give you a general right to former franchisees’ contact details or access to their confidential affairs. If the franchisor is unwilling to arrange contact, ask for an explanation and suggest that they forward your invitation instead. A lack of contact is something to investigate, not proof of problems in itself.

4. Compare experiences before deciding

Make brief notes after each conversation. Record the person’s circumstances, specific events and your own interpretations separately. Agree whether you may quote them to the franchisor; do not share confidential information without permission.

Look for patterns rather than isolated praise or criticism. Several independent accounts of the same problem warrant further investigation. A former franchisee’s negative experience may be important, but it needs to be understood in context: was it caused by personal circumstances, the local market or the relationship with the franchisor?

Raise significant discrepancies with the franchisor in a neutral way. Ask for specific explanations rather than general reassurances. If an answer includes a promise that is crucial to your purchase, your adviser should help ensure it is clearly incorporated into the contractual documentation.

Practical rule of thumb: Do not choose a brand on enthusiasm alone. Speak to a range of franchisees, ask consistent questions and resolve recurring concerns before committing to the network.