Franchises can offer unique opportunities for business success but only if the legal arrangements that govern the relationship with the franchisor has the same outstanding qualities as the business model to which the investor is attracted.Contact us today
The top 10 must-dos before entering into a franchise agreement
- investigate all commercial claims and disclosures in the franchisor disclosure statement.
- spend time with at least three other franchisees to discuss their experience and profitability in detail.
- conduct a detailed analysis of the benefits and detriments of the proposed franchise location.
- get professional financial advice to test financial and other projections from the franchisor.
- assess the uniqueness of the franchisor business model.
- understand the commerciality of the franchisee business share ie territory, franchise fee etc.
- investigate the financial soundness of the franchisor.
- assess the capacity to grow volume in the franchise.
- ensure sufficient working capital.
- assess the likelihood of non-franchisee competitor threats.
And of course get sound and competent legal advice as to the franchisor disclosure statement, the franchise agreement and all other ancillary documentation.