Franchises offer a lot of benefits to a new entrepreneur. You
get the boost of an established brand, complete training systems
and continuing support throughout your time with the company.
However, you will need to make a healthy investment to start the
business. These systems also control what you can change in your
own business and don't guarantee any amount of profits.
Prospective business owners will need to investigate a new
franchise opportunity thoroughly before signing any paperwork.
Try these five methods for gathering information.
1. Discuss your plans with other franchisees.
Talking with existing business owners working within the
system will give you a realistic view of your chances for
success. Speak with as many owners as you can to gather a wide
variety of opinions and criticisms. Call the franchiser as well
and ask as many questions as possible. Get their explanations on
franchise fees, obligations, supply chain requirements and other
important issues. Call again and ask more questions after you
read through the actual franchise contract.
2. Sample a wide variety of options.
Attending large franchise conferences and events will help you
learn about all of your options. The International Franchise
Association's annual expo gives you a chance to meet with over
300 franchisers in one weekend. Take a variety of brochures and
consider what you want out of your new business.
3. Talk with a professional.
There are consultants that use their experience with a
franchiser to help advise you on starting your own business.
Theses coaches are usually paid by the franchising company,
giving you plenty of one-on-one help for free. You should also
consider having a franchise attorney go over the contract from a
franchise before signing it. This can cost up to $2,000, but it
should be considered as a necessary fee related to the start up
of your business.
4. Check with the Better Business Bureau.
Consumers and business owners can file complaints against
franchisers with the BBB. Too many complaints will indicate a
serious issue with the business plan that you are preparing to
invest in. You can also investigate any legal complaints pressed
against the parent company by writing to the FTC. Don't overlook
disagreements with individual franchise owners. If an
establishment in the next town has upset consumers in the town,
you may not start with the best reputation either.
5. Search the web.
The Internet can be full of misleading information, but
careful searching will provide plenty of insight. Try searching
for information on your prospective business agreement on the
International Franchise Association's World Franchising website.
Information on the biggest and most well-known franchises around
the world is aggregated there on a daily basis. FranData will
give you a chance to check contracts and other documents before
contacting a franchise company.
After doing the above, you're ready to go.
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