Franchise Seeker

Quite possibly the single largest mistake prospective franchisees make is not contacting several current franchisees.  Discussing any concerns that you may have with existing franchisees is critical if you hope to be successful as a new franchisee.   Buying a franchise outlet may very well be one of the most important financial decisions of your life, so doing the necessary investigative work beforehand is vital.  If you are given a tour that includes two or more franchisees, you should make a point of returning to those franchisees at a later date in order to ask any questions that you could not approach while in front of the franchisor or franchise representatives.  Another important factor is to find out whether the franchisor has introduced you to specific franchisees that have been financially rewarded for their assistance in soliciting new franchisees.  Franchisees who have been paid for their help may be biased in their opinion of the franchise as a whole and how they represent the franchise as well.

Other than the franchisees introduced to you by the franchisor, to get the true “big picture” you should do the investigating necessary to contact others listed in the disclosure document who have no vested interest in soliciting prospective franchisees.  While interviewing these other franchisees, be sure to ask them if the franchisor has a reputation for honest and fair business practices.  Also, ask their opinions of the current franchise disclosure agreement.  Is it fair and accurate?  Additionally, you can seek the help of these particular less-biased franchisees in verifying any other information that was not set clearly forth in the disclosure document.

It is important to look at different franchises

 So, you’re thinking of buying a franchise? As a prospective franchisee, you should begin by reading and asking questions about the disclosure agreement of the franchise that most interests you.  Disclosure agreements for franchises are generally lengthy, but very crucial for you to read and fully understand.  As you read each document in its entirety, carefully take notes on those items within the agreement that you find ambiguous or confusing. 

One of the most common difficulties that arise between new franchisees and a franchisor is a misinterpretation of responsibilities.  Be sure to read the franchise disclosure agreement carefully to determine your responsibilities, as well as the obligations of the franchisor.  Do not assume that the franchisor is responsible for any particular support service.  If it’s not spelled out in the disclosure agreement and you feel that it should be, be sure to get all of your concerns in writing and clarify which duties, obligations and responsibilities belong to whom within the franchise relationship.

Your next step is then to seek sound legal advice.  Simply put, locate and retain an attorney who is preferably experienced in all aspects of franchise law.

Once you have retained a franchise attorney, get an accurate, complete interpretation of the franchise agreement and other legal documents involved.  You and your attorney should carefully review the franchise agreement, lease or real estate agreements, and any other related contracts together.  Make a list of questions to go over with your attorney and then present your list of concerns to the franchisor and get clarification of those concerns from the franchisor in writing. 

Remember to lookup different franchise opportunities

If you are looking to buy a franchise , sell a franchise or franchise your business then this site will tell you about all your options including costs, expenses and options. A great start is the franchise overview franchises page, the car leasing overview car leasing franchise page will also provide fantastic information and a great overview.

If on the other hand you own a business which would be suitable for franchising then the franchise consultants overview Franchise Consultants Page will provide you with more information.

Please let me know how you get on and don’t forget to visit the franchise opportunities directory . All the best – speak to you next week.