Franchising Trends

Questions to Ask Before Signing the Paperwork

You have done all the research work, checking through the various franchise opportunities. You looked at the prospects of many franchises before settling for the one that is within your reach. You did a background check, read the UFOC, talked with other franchisees and now it is the time to sign the final deal. But that does not mean you should stop asking questions; there is always the proverbial “There’s many a slip between the cup and the lip”. Here are some more questions that you should ask before signing the agreement papers:

• Is the franchise a renowned brand? When you invest in a franchise, you are investing in its name, so that you do not have to advertise from the scratch. With an established name, it is no problem, but when you have chosen an emerging brand (which is in business for less than five years and has few franchisees), then remember you will have a lower edge than your competitors from the same category.

• Who are the people running the show? This is another very important question to ask. You should know the background of the people who are running the franchising business. They must have enough qualification and experience to guide a newcomer like you. Also check whether any of them have a criminal background or the company is facing any lawsuit.

• Will there be a demand for the product in future? When you invest all your hard earned money, it should be for the lifetime. So, you must prefer a market that has a bright future ahead. Do not go just after concepts that are in “hot” demand; they may turn out to be temporary fads and can go down after some years.

• Does the franchisor have registered trademarks? Uniqueness should separate you from others in the field; so check with relevant authorities on whether the franchisor have patented concepts/products and a registered trademark, logo, name, slogan or a combination of all these. That will be your selling point, so be careful enough regarding these issues.

• Does the franchisor choose the franchisee randomly? When you have been chosen, don’t hesitate to ask why you have been selected. Was it for your financial strength or qualifications and experience? The selection process will tell you whether the franchisor is interested to develop you as a franchisee or just looking to get as many franchisees as possible.

• What is the financial condition of the franchisor? Just as the franchisor will like to know about your financial state, so should you about his. This will tell you whether the money you give will be used in your development or spent in the betterment of the franchisor.

brandEXPANSION associates can help you navigate all the questions that come up in your franchise purchase process. Contact us for more information.