A Listing OF Questions To ASK Before Purchasing A FRANCHISE

A Listing OF Questions To ASK Before Purchasing A FRANCHISE - Franchise companies like Jack-In-the-Box, Wendy's, and McDonald's are experiencing tremendous growth. The individuals establishing franchise concepts and enterprises are aware of a good thing and are actively pushing it. An ever-growing number of franchises are available for almost any type of business.

Certain franchises are excellent. They give excellent treatment to both the franchisor and the franchisee. Some are incredibly biased. Others are nearly complete scams that trick you into paying ten to fifty times the real cost of the equipment, company concept, or other item they are trying to sell you.

You should thoroughly research a franchise before investing any money in it. Before investing, you should acquire satisfactory answers to the questions on our list of recommended questions.

1. Has your lawyer read the franchise agreement and thoroughly discussed it with you both, and do you both readily approve it?

2. Does the franchise require you to do anything considered dubious, foolish, illegal, or even criminal in your state, county, or city?

3. Is your territory exclusive to you for the duration of the franchise agreement, or can the franchisor offer you a second franchise in your area?

4. Is the franchisor affiliated with another franchise business offering comparable goods or services?

5. How are you protected from the second franchising firm if the answers to the previous questions are yes?

6. In what situations and at what expense can you terminate the franchise agreement?

7. Will your goodwill be returned to you, or will it be forfeited if you sell your franchise?

8. How long has the company selling you the franchise been in business?

9. Does the franchisor with whom you are considering have a track record of integrity and equitable business practices among its franchisees?

10. Has the franchisor provided any verified financial data showing the precise net earnings of one or more members? If yes, have you personally verified the data with these individuals?

11. Will the franchisor provide you with employee and management training programs, public relations and advertising, capital, credit, merchandising concepts, and public relations and advertising?

12. Will the franchisor help you locate an appropriate location if necessary?

13. Does the franchising company have sufficient funding to execute its strategic plans?

14. Does the franchisor have highly skilled and knowledgeable management?

15. In what way can the franchisor assist you that you are unable to perform on your own?

16. Has the franchisor sufficiently looked into you to be confident that you can run a profitable business for both of you?

17. Is there legislation in your state that governs the selling of franchises? If yes, has the franchisor satisfied your needs in adhering to the law?

18. What equity capital is required to buy and run the franchise until your earnings and expenses are equal?

If you can answer these questions satisfactorily, you will likely consider purchasing a decent franchise agreement. Before you invest or sign anything, look into any of these questions and get the answers you need clarification.

Purchasing a franchise might offer stability and guaranteed financial success in certain situations. Less than 20% of franchised businesses fail, according to business surveys. This contrasts the 60–80% failure rate that ALL newly established firms in this nation experience annually.

The franchising directories, typically available at the local library, provide information about particular franchising concepts. Frequently, a notification will be shown within franchise locations.

If you can afford to start this business, the odds are in your favor. Now that you have some CAUTION, STOP, and GO signs, you are ready!

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