Deciding which company to work with can get confusing but here are a number of factors to consider. Before tying-up with a company, take out time to understand how its franchise operation functions. These are some of the areas that you need to concentrate on specifically:
- Will it be profitable?
- the business will require a large investment from you.
- make sure you have detailed budgeting
- get professional help from an accountant
- Study franchise disclosure document
- mandatory for company offering you franchise to furnish information on issues connected to operations of business opportunity
- franchise disclosure document reveals the fees that you can be charged, the initial investment that is needed, the territory that is being allotted to you and information on the revenue that the franchiser will generate through sales to you. Details of litigation that the franchiser is engaged in will also be furnished.
- Visit existing locations
- see how well it is doing
- number of customers
- look at sales
- look at transaction size
- Territory allotted to you
- exclusive territory?
- franchiser within its rights to appoint additional franchisees in your area of operations?
Answer to these questions will determine if your successful or a failure in business. Study your agreement and understand it fully.
Take Your Time
Negotiate with two franchisers and compare them. Remember, that you will be spending eight hours or more a day on your new business. Ask yourself if you are comfortable with the product or service that you will be selling.