What is attractive about this franchise?

* Is the name well known?

* Do you like the concept?

* Is it a ready-made business with full training?

* Does the franchisor give plenty of support?

* Do you feel comfortable with the franchisor?

* Is return on investment realistic?

* Is the business formula proven?

What can the franchisor do for you that you canÕt do for yourself? You must be comfortable with the type of business.

How much experience and success has your franchisor enjoyed?

* How long has the franchise been around?

* Is the idea imported? Has it succeeded overseas?

* How many other outlets are there? More is better.

Is the franchisor a one-person operation or an experienced corporation? Remember: Risk Equals Reward.

Who are the franchisor’s directors and officers?

* What is the franchisor’s financial condition?

* Have you seen a disclosure document?

* What is the franchisorÕs total personal investment?

What can you find out about the franchisor’s business background. Find out everything you can.

Will the product or service succeed?

Is such a product or service growing in the market place?

* What is the public’s general opinion of the sector?

* Is the national press reporting growth?

You need a product or service with a healthy life span. Neither a craze nor a fad. Your best bet is a sector with a long future.

What innovations has the franchisor introduced most recently?

* Is the product patented or protected by trademarks or copyright?

* Is the franchisor a one-trick pony, or a consistent innovator?

Is the franchisor consistently upgrading – or is this all you get. If so – is it enough for the future?

How strong are your potential competitors?

Have you studied whether or not the product or service that you intend to sell has a market in your territory at the prices you will be charging?

One advantage of joining a franchise is that you get an established brand to put you ahead of your competitor. How established is this brand?

How is the Franchise Agreement structured?

What exactly are the formal obligations of the franchisor as defined by the franchise agreement?

* Renewal rights

* Territorial protection

* Tied-purchase arrangements

* Common advertising fund

Under what circumstances can the franchisor terminate the Agreement and how?

Does the Agreement satisfy you in all areas?

1. Parties involved.

2. Site and necessary construction.

3. Exclusive territory.

4. Terms and renewal conditions.

5. Breach and termination of contract.

6. Upfront fees.

7. Continuing royalty.

8. Ad levy.

9. Purchases by franchisees.

10. Training.

11. Trademarks.

Also check your ability to assign or sell the franchise to an outside party. Do you understand every clause in the Agreement?

Will this location/territory work for me?

What assistance does your franchisor give with local promotions?

Is the territory exclusive?

What will you be given in start-up assistance?

Will the outlet be a running as a profitable business from week one? Or will you have to build hard – if so, what support does the franchisor give?

What can you find out about the locality?

* Australian Bureau of Statistics (ABS).

* Market research.

* Local council data.

* Regional newspapers.

* Personal observation.

Ensure that your new enterprise suits the present and future demographics of your locality. The ABS is the most authoritative source.

What about other franchisees?

What contact have you made with other franchisees prior to the purchase?

* None

* Franchisees selected by the franchisor

* Free and open access

The names of every franchisee in the system is included in the Disclosure Document. They are your best source of information. They can advise as to what to expect as a franchisee. However, recognise that in all systems, there will be some that may be unhappy. It is best to talk to several to get a cross section of views.

How do you relate to the “company culture”?

* Do you identify with what’s going on?

* Can you see a future for yourself in the franchise activities?

* Do you feel comfortable?

Are the other franchisees “your type of people?” They need to be! They will be your closest business siblings.

Do the other franchisees have similar goals to you?

What do the other franchisees think about the franchise concept – and where do they want to take it? Can you identify closely with their goals? Each franchisee is a link in the chain. Your chances of winning largely depends on whether they are winners too.