Taking on a franchise is a big decision – right there with marriage and moving house – so it requires careful and due examination.
So rule number one – don’t rush and don’t let the Franchisor rush you.
Second rule, when you think you have found the right business, the right opportunity – stand back and ask yourself these ten questions.
- Do they have a solid trading history?
- Are they financially sound?
- Do they have a history of success?
- Is there a genuine Head Office support structure?
- What do they actually provide by way of support?
- If the franchisor supplies product, what are the T’s and C’s?
- What is their position in the market?
- Are projected cash flows realistic? Can they prove so?
- Does the company have a finance facility with the banks?
- How tough is their interview process?
Rule number three – take the franchise agreement to a bfa accredited lawyer and get feedback on its contents and meaning.
Rule number four relies on you locating that that most elusive of mammals – a half decent accountant – to work with them to create a business plan.
Finally, make your decision!
In summary four rules you should obey before you sign on the ……….. line.
Don’t rush, ask questions (of yourself), take professional advice, make a decision.