subject: Questions To Ask When Purchasing A Franchise. [print this page] There are many people considering the purchase of a franchise these days because it can be an excellent way to control of your finances and your future.
Key Questions To Ask
When evaluating a franchise, you need to take on the role of investigator. Buying a franchise requires detailed knowledge of what it takes to succeed in that business. The more you know now, the better off you will be when the deal is done. Here's a suggested list of questions you should ask:
1. How much will it cost?
2. What does that include?
3. Are there other fees you'll be responsible for such as business licenses, equipment purchases, insurance, building upgrades, signage or contributing to an advertising fund?
4. Will they help you with employee staffing?
5. How involved is the training and is it part of the upfront fee?
6. Does the franchisor help you determine the location of your business or are you on your own?
7. What are the restrictions protecting your territory?
8. What is the success rate of other franchisees?
9. If there have been failures, what was the primary cause?
10. What is the average time before new franchisees begin turning a profit?
11. How are royalties calculated - fixed amount or percentage?
12. How long does your agreement last?
13. What are the conditions for termination of the agreement for both parties?
14. What are the conditions for renewal?
As the above questions are answered, you'll have many follow-up questions of your own. Once you have the answers you need, review them with a friend or your spouse. Ask them to challenge you. Create a second list of follow-up questions for your next decision. Remember, this is your future we are talking about. You can't ask too many questions.
by: Acey Fred
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