Choosing a franchise: how to interview franchisees

Before choosing a brand, speaking to people who already run a business within its franchise network allows you to check how its sales promises translate into day-to-day work. One enthusiastic account is not enough, however: you need a range of perspectives, comparable questions and concrete evidence. The aim is not to collect verdicts on the brand, but to understand whether the opportunity matches your expectations and resources.

1. Choose who to speak to without relying solely on the franchisor

In Italy, franchising is governed by Law No. 129 of 6 May 2004. Article 4 requires the franchisor to give the prospective franchisee a complete copy of the contract, together with the required attachments, at least thirty days before signing. These include a list of franchisees currently operating within the network and company-owned outlets.

That list provides a useful starting point for choosing independently who to contact. It does not, however, mean that franchisees are obliged to agree to interviews or share confidential financial information. Introduce yourself, explain that you are considering joining the network and suggest a short conversation at a time that fits around their work.

By all means ask the franchisor for some introductions, but do not limit yourself to the names they suggest. Look for different experiences:

• a franchisee who has opened recently and remembers the start-up phase clearly;
• a longer-established franchisee who can describe how the relationship has evolved;
• a business comparable to your proposed operation in size and local circumstances;
• an owner who is on site every day and, where relevant, one who delegates some of the day-to-day running.

Always distinguish company-owned outlets from franchised ones: an employed manager can explain how a shop operates, but may not be able to describe the financial risk borne by an independent business owner.

2. Prepare questions that elicit verifiable facts

Use the same set of core questions for everyone. Asking ‘Are you happy with it?’ can open the conversation, but the answers are too general to support an investment decision. Instead, ask about specific events, timescales and differences from their initial expectations.

A practical set of questions might include:

• Expectations: which aspect of the business turned out to be most different from what you imagined before signing?
• Start-up: which specific problem took the longest to resolve, and who helped resolve it?
• Organisation: which tasks take up most of the owner’s working week?
• Costs: which expenses were underestimated in the original plan?
• Relationship with head office: how is a request handled if it is not resolved at the first point of contact?
• Changes: can you describe a recent operational change and how it was communicated?
• Overall assessment: what checks would you carry out today before signing the same contract?

When someone gives an opinion, ask for an example: ‘Support is prompt’ becomes more useful when accompanied by an account of a specific request. Avoid asking for confidential manuals, login details, customer data or documents the person is not authorised to share.

If you are taking notes that you intend to share with your advisers, make that clear. Ask for consent before recording the conversation: being transparent encourages more candid answers.

3. Compare answers without turning them into forecasts

After each conversation, record the information in a table with four columns: question, answer, business context and further checks needed. Keep reported facts, personal opinions and documents you have actually reviewed separate.

Differences in circumstances matter. A franchisee who owns their premises, has previous experience and works on site every day may achieve results that are not comparable with those of someone who pays rent and employs a manager. How long the contract has been in place can also make a difference: the terms applying to a long-standing franchisee may not be those offered today.

If someone shares financial results, clarify the period covered and what the figures mean. ‘Earnings’ could mean takings, margin before fixed costs or income after certain expenses. Without those clarifications, comparisons risk being misleading.

Do not turn an average of these accounts into a forecast for your own outlet. Use the conversations to identify assumptions to check with your accountant and questions to put to the franchisor. A single negative experience does not prove there is a widespread problem; similar concerns described independently by several people do warrant further investigation.

4. Raise concerns before signing

Prepare a short list of the discrepancies you have identified and ask the franchisor for written clarification, without naming the people behind particular comments unless you have their permission. If an account relates to terms that differ from yours, ask which document currently governs that point.

Conversations do not amend the contract or replace a legal review. Law No. 129/2004 requires the franchise agreement to be in writing, otherwise it is void. If a commitment is crucial to your decision, ask your adviser how it should be formally recorded rather than relying on another franchisee’s account of their experience.

Practical guidance: before deciding, complete three steps: listen to a range of experiences, compare them with the proposal you have received and obtain documented clarification of significant discrepancies. Other franchisees’ accounts should help you ask better questions, not hand your decision over to someone else.