Frequently Asked Questions About Investing in a Franchise

1. What Is Franchising?

Franchising is essentially a partnership. It’s a contract between the franchisor—the owner of the brand—and the franchisee, who runs their own independent business under the franchisor’s rules and business model. While it offers a proven system, it requires adherence to specific guidelines. I discuss how strategic partnerships work in Authority Marketing Secrets, which dives deeper into building successful business relationships.

2. How Safe Is My Money?

Like any business venture, franchising carries risk. Yes, there’s a blueprint, but nothing is guaranteed. Some franchisors may offer opportunities to sell the franchise if things don’t pan out. However, it’s crucial to research the opportunity thoroughly and get a qualified franchise lawyer to review your contracts. I highlight due diligence and risk management strategies in my blog “Mindset Mastery for Entrepreneurs”.

3. Is the Opportunity Legitimate?

Before diving in, ask yourself: Is this franchise real, or am I being sold a dream? Resources like Scambusters.org can help, but also demand financial disclosure documents. Don’t rely only on the people the franchisor points you to—ask for a list of recent franchisees so you can get an unbiased view. In Wealth Creation Strategies, I stress how proper verification is key to protecting your financial future.

4. How Much Money Do I Need to Invest?

Initial franchise investments vary widely. But don’t just focus on the upfront fee—consider ongoing costs like royalties, product purchasing, marketing fees, and operational expenses. Always calculate how much working capital you’ll need before profits start rolling in. I cover smart financial planning techniques for business owners in my book Discipline Equals Destiny.

5. How Much Will I Earn?

Franchise earnings vary, but disclosure forms usually offer a general idea of average income. Remember: the key question isn’t just how much others are earning, but how much you need to earn to justify the investment. I explore this concept of aligning income goals with business models in The Inner Game of Success.

6. How Long Before I Open?

Every franchise has its timeline—from securing property, to setup, to staff training. Ask the franchisor and current franchisees how long it typically takes from signing the contract to grand opening. Write down their answers, compare timelines, and factor this into your financial planning. I discuss business setup processes and pacing in The Side Hustle Blueprint.

7. When Will I Become Profitable?

A well-known, established franchise may reach profitability faster than a lesser-known brand. Review financial reports, but remember—your profit timeline will also depend on location, market demand, and how well you implement the franchisor’s system. In my blog “Purpose and Profit: Aligning the Two”, I talk about how profit must always align with purpose and strategy.

8. Do I Need a Lawyer?

The short answer is yes. Always hire a qualified, independent franchise lawyer to read and explain every detail of the agreement. Don’t rely solely on the franchisor’s legal team. Protecting yourself legally is one of the smartest moves you can make as a business owner, something I emphasize in The Entrepreneur’s Guide to Mental Strength.

9. Is Buying a Franchise Safe?

Buying a franchise is as safe as the amount of research, preparation, and self-education you’re willing to commit to. It’s only risky when people skip steps. The more you study, question, and analyze, the safer it becomes. I cover strategic decision-making skills in Manifestation Blueprint, so you’re never relying on chance.

10. What Other Fees and Competition Should I Expect?

You need to be crystal clear about ongoing fees—royalties, product sourcing, advertising fees—and whether there are limits on competition in your region. Some franchisors require non-compete clauses or have tight territory regulations. Understand these fully before signing. And most importantly, ensure the business model aligns with your long-term goals, as I discuss in The Millionaire Mindset Shift.

Final Thought: Franchising can be an excellent path to business ownership—but only if you approach it with eyes wide open. Do the homework, ask the uncomfortable questions, and protect your investment. Ready to make smarter business decisions? Dive into my full collection of books and coaching at keithmuoki.com.