What does your franchisor offer that you can’t do or get for yourself?
* Specialised equipment.
* Administration aids (product labels, logo, forms etc).
* Point of Sale material.
* National advertising program.
* On-going training programs.
* IT Support.
* Uniform and image.
The franchisors promise is to give you both an established brand name and an established business. Will it work?
Just how good is the product or service?
Exactly what is your franchisor good at
* Product or service
* Marketing
* Picking the trends and Purchasing
A great product or service is only part of the promise. Eventually that product or service will be superseded – whatever it is, you want a franchisor that is up with the times.
Does the franchisor communicate well on an ongoing basis?
* Newsletter – Internet – Regular meetings
* Annual meetings – Avenues for franchise feedback
* Field visit – Help when you need it
* Franchise Advisory Council
You want to stay close to the action in your franchise system. Are the avenues of support present and established?
What about the future?
What are your franchisor’s future plans?
* Expansion
* Diversification
* Sell out
* Grow
Are you prepared to spend much of the remainder of your business life with this franchisor? Or is this a stepping stone? How?
What dispute resolution facilities are in place?
* Franchise Advisory Council
* Mediation process
* None
Find out the mechanisms that are in place should a dispute arise. Avoid court at all costs! Consider such potential problems before signing.
How do you see this franchise purchase fitting into your personal plan?
* Build it up, gain more stores or territories.
* Sell it in 3 – 5 years
* Upgrade within the franchise network
* A stepping-stone to your own business initiative.
Your franchise is something you must live with daily. It must therefore make sense in terms of what you want to do with the next few years of your life.
As you can see, the information you need to obtain covers the following four important aspects:
1. Your suitability to be a franchisee,
2. The credibility of your franchisor,
3. The business itself,
4. The fairness of the deal.
If you are healthy in all areas, you will probably succeed in your venture. Good luck!