Buying a franchise: assess the network through franchisee interviews

A franchise network is a community, and its franchisees can provide valuable insight into how it operates. Before joining, find out whether their experiences match the picture presented during recruitment. A single recommendation, however, is not a comprehensive assessment. A structured series of interviews helps you distinguish recurring practices from individual experiences and identify matters that still need to be checked against documents.

1. Choose interviewees who offer useful comparisons

Ask the franchisor for the opportunity to speak to current franchisees. Explain that you want to assess whether the network is right for you and test assumptions that matter to your decision. The references suggested by the network are a good starting point, but their experiences may not represent the whole community.

Seek out franchisees at different stages: someone who has recently started, an established operator and, where possible, someone who has left the network. Also speak to a franchisee whose outlet has a similar location, size and customer base to the business you are planning. An established outlet in a large city does not, on its own, tell you what prospects might be like in a new location.

Arrange the conversation in advance and explain how you will use your notes. Do not ask for trade secrets, personal data or documents whose disclosure would breach confidentiality obligations. Interviewees decide for themselves what they can share. Nor should you expect the network to disclose franchisees’ private contact details without an appropriate basis.

Record background information for each conversation: when the business started, the type of outlet and whether the franchisee set up a new unit or bought an existing one. This will help you avoid automatically attributing differences arising from different starting points to the network’s strengths or weaknesses.

2. Ask consistent questions and request examples

Prepare a common set of questions before your first interview. Asking everyone about the same topics makes their answers easier to compare. Start with open questions, then ask for more detail. “How has the working relationship been?” will generally produce more useful information than a question that already assumes the network performs well or badly.

Useful questions include:

• Which aspects of the picture presented before you joined best matched reality?
• What important issue only became apparent once you had started trading?
• How is franchisee feedback handled, and what has changed as a result?
• How does the network respond when a franchisee disagrees with a proposed solution?
• Have common operating practices been applied consistently across franchisees?
• What would you now check before deciding to join?

After asking for an overall assessment, request a concrete example. If a franchisee says communication is slow, find out what the issue was, when it happened and how it was eventually resolved. An isolated delay and persistent difficulty getting a response are different findings.

Also establish when the experience took place. The network’s management, operating model or the franchisee’s own agreement may have changed. An older experience may reveal an important risk, but it does not establish current practice on its own. Avoid promising absolute anonymity, too: in a small community, an incident may be recognisable even without a name.

3. Distinguish experiences, claims and contractual rights

Finland has no dedicated franchising act, statutory franchise-specific pre-contractual disclosure document or separate franchise register. However, franchisees remain subject to general business registration requirements and other statutory obligations. The contractual relationship is governed by, among other things, Finland’s Contracts Act and general principles of contract law, as well as the Competition Act and EU competition rules.

The Finnish Franchising Association’s Code of Ethics is a form of self-regulation, not law. Find out whether the franchisor has committed to it and how it is reflected in the agreement you have been offered. A franchisee interview is no substitute for a legal review of the agreement, nor does it automatically give you the same rights as another franchisee.

Divide your notes into three categories: personal assessments, events to verify and contractual rights. “The network listens to franchisees” is an assessment. An account of how specific feedback was handled describes an event you can seek to verify. A right to participate in decision-making, by contrast, needs to be supported by an agreed arrangement if you intend to rely on it in your own business.

If a franchisee says they have been granted an exception to the network’s usual practice, do not assume it will apply to you. It may stem from a separately negotiated arrangement or an older agreement. Ask the franchisor to confirm in writing exactly what is being offered to you. A friendly conversation does not turn someone’s account of their experience into a contractual term.

4. Turn findings into conditions for your decision

After the interviews, compile a short table of findings. Record each finding, when it relates to, how comparable it is to your own plans and what further checks are needed. Do not simply count positive and negative comments. One significant, documented problem may carry more weight in your decision than several general recommendations.

In your discussions with the franchisor, focus particularly on themes that recur in independent conversations. Describe each finding neutrally and respect your interviewees’ confidence. Ask how the network identifies the problem, what has been done about it and how you can verify current practice.

Assess the quality of the response as well. A precise explanation, a named person responsible and a procedure you can verify are more useful than reassurance alone. On the other hand, the network may not be entitled to disclose an individual franchisee’s confidential affairs. In that case, ask for an explanation of the general procedure rather than a detailed account of the case.

Finally, set your own decision threshold: which matters have been clarified, which require written confirmation and which uncertainties would prevent you from committing. Keep accounts of personal experience separate from verified information. That way, neither a personable advocate nor one disappointed franchisee will determine your choice alone.

Practical reminder: interview a range of franchisees using the same set of questions, look for recurring findings and verify important promises in writing before signing.