Checklist for Evaluating a Franchise

The Franchise

  • Did your lawyer approve the franchise contract you are considering after he or she studied it paragraph by paragraph?
  • Does the franchise give you an exclusive territory for the length of the franchise?
  • Under what circumstances can you terminate the franchise contract and at what cost to you?
  • If you sell your franchise, will you be compensated for your goodwill (the value of your business’s reputation and other intangibles)?
  • If the franchisor sells the company, will your investment be protected?

The Franchisor

  • How many years has the firm offering you a franchise been in operation?
  • Has it a reputation for honesty and fair dealing among the local firms holding its franchise?
  • Has the franchisor shown you any certified figures indicating exact net profits of one or more going firms which you personally checked yourself with the franchisee? Ask for the company’s disclosure statement.
  • Will the firm assist you with:

A management training program?

An employee training program?

A public relations program?

Capital?

Credit?

Merchandising ideas?

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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