To Answer Before You Buy A Franchise
Franchise businesses such as
Quizno's, PostNet, Comfort Keepers,AlphaGraphics
booming even with this difficult economy.
Franchises for just about every conceivable kind of business are being sold in ever
increasing numbers. Some
very good. They
treat both the franchiser and
the franchisee very well. Others are very one-sided. Still
before putting any money into a franchise, you should investigate
The following is a list of questions you should be asking, and should get
satisfactory answers to before investing:
1. Has your attorney studied the franchise contract, discussed it completely with you, and do you both
approve it without reservations?
2. Does the franchise require you to take any steps which are either illegal or even border on illegal,
or are otherwise questionable or unwise in your state, county or city?
3. Does the franchise give you an exclusive territory for the length of the franchise period, or can
the franchiser sell a second franchise in your territory?
4. Is the franchiser connected in any way with any other franchise company handling similar products or
services? If yes, what is your protection against the second franchising company?
5. Under what circumstances can you end the franchise contract, and at what cost to you?
6. If you sell your franchise, will you be compensated for your goodwill or will it be lost to you?
7. How many years has the firm who is offering the franchise been in operation?
8. What is the reputation of the franchiser among its existing franchisees?
9. Has the franchiser shown any certified figures indicating exact net profits of one or more of its
members, and have you personally checked the figures with these people?
10. Will the franchiser assist you with: a) A management training program; b) An employee training
program; c) A public relations and advertising program; d) Capital; e) Credit; f) Merchandising ideas?
11. If needed, will the franchiser assist you in finding a suitable location?
12. Is the franchising firm adequately financed so that it can carry out its growth plans?
13. Exactly what can the franchiser do for you that you cannot do for yourself?
14. Has the franchiser investigated you carefully enough to assure itself that you can successfully
operate a profit to both of you?
15. Does your state have a law regulating the sale of franchises, and has the
franchiser complied with
that law to your satisfaction?
16. How much equity capital will you need to purchase the franchise and operate it until your income
equals your expenses?
If you can get the answers to each of these questions, and those answers satisfy you, then you're
probably thinking about buying a pretty good franchise deal. However, if you're in doubt about any of
these points, be sure to check it out and know the answers for certain before you invest or sign
Buying a franchise can give you a measure of security, and in some cases, sure-fire profits.
Business surveys show that fewer than 20 percent of all franchised businesses fail.
If you can afford the entry into this business, statistics are on your side.
Information regarding specific franchising ideas can be found in the franchising directories, which are
generally available at the local library. Often there will be a notice posted in franchise outlets
By taking the time to get the answers to these questions you are now armed with valuable information
which may make the difference in the success of your business.
We wish you continued success.