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Buying a franchise can be a very good experience. It can also turn out to be a bad experience unless you are prepared. You can’t always expect the franchisor to look out for your best interest. Franchisors are concerned with presenting their investor with the company's best image. You must wade through their story to discern fact from potential concern. What are the promotional expenses and royalty fees and how do they compare with similar franchises in other concepts? How does your initial buy-in compare to similar brands? What distinguishes this franchise from all the other competitors? Do you have best practice industry tools at your disposal? What is the history and reputation of the brand? Do you have the best available advisors for hiring, training, site selection, lease negotiations, business planning and securing loans? How easy is to access and deal with company franchise support? What are your territory rights? “Discovery Day” with a franchisor is the critical time to ask the probing questions which will reveal important information about the company’s background, stability and future outlook. Be prepared and have the proper representation with an experienced consultant. This one step can save you money, time and anxiety ensuring that you have selected the right business investment. The Franchise Disclosure Document (FDD) has replaced the Uniform Franchise Offering Circular (UFOC) and is a document that the franchisor is obligated to give you prior to inking a deal. The time frame for review is narrow as the franchisor is only obligated to give you this information 10 days prior to the deals closing. Unfortunately, many prospective franchisees give this document a cursory review. The FDD contains valuable operations information which will aid the franchisee in evaluating the purchase. Important considerations are: lawsuits, profitability, purchasing obligations, and a list of the present and past franchisees that you can contact. Looking over franchisor resources used in store openings is also an important concern because it indicates the emphasis the organization puts on creating a successful business. If you are starting a business operational model for the purpose of franchise growth, we also can help you plan for multi-unit growth. It's much easier to do this process on paper first through a business plan. Know your options. Have confidence in the process. Protect your investment and have someone help you through this process. Give us a call to get started.
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