Franchise
businesses such as McDonald's, Burger King, and Kall
Kwik
Printing, are booming.
The
people setting up franchise ideas and businesses know a good
thing,
and are really promoting this idea.
Franchises
for just about every conceivable kind of business are
being
sold in ever increasing numbers.
Some
franchises are very good. They treat
both the franchiser and
the
franchisee very well.
Others
are very one-sided.
Others
are almost total rip-offs, that trap one into paying ten to
fifty
times the actual value of the business idea, equipment, or
whatever
it is they are trying to get you to buy.
Before
putting any money into a franchise, you should investigate
everything
completely.
We've
prepared a list of questions you should be asking, and
should
get satisfactory answers to before investing.
1. Has your lawyer studied the franchise
contract, discussed it
completely
with you, and do you both approve it without
reservations?
2. Does the franchise require you to take any
steps which are
either
illegal or even border on illegal, or are otherwise
questionable
or unwise in your county or city?
3. Does the franchise give you an exclusive
territory for the
length
of the franchise period, or can the franchiser sell a
second
or third franchise in your territory?
4. Is this franchiser connected in any way with
any other
franchise
company handling similar products or services?
5. If you answered yes to the above question,
what is your
protection
against the second franchising company?
6. Under what circumstances can you end the
franchise contract,
and
at what cost to you?
7. If you sell your franchise, will you be
compensated for your
goodwill
or will it be lost to you?
8. How many years has the firm offering you the
franchise been in
operation?
9. Does the company offering you this franchise
have a reputation
for
honesty and fair dealing among its franchisees?
10.
Has the franchiser shown you any certified figures indicating
exact
net profits of one or more of its members, and have you
personally
checked the figures with these people?
11.
Will the franchiser assist you with:
a)
A management training programme;
b)
An employee training programme;
c)
A public relations and advertising programme;
d)
Capital;
e)
Credit;
f)
Merchandising ideas.
12.
If needed, will the franchiser assist you in finding a
suitable
location?
13.
Is the franchising firm adequately financed so that it can
carry
out its stated plans?
14.
Does the franchiser have experienced management training?
15.
Exactly what can the franchiser do for you that you cannot do
for
yourself?
16.
Has the franchiser investigated you carefully enough to assure
itself
that you can successfully operate at a profit to both of
you.
17.
Does your area have a law regulating the sale of franchises,
and
has the franchiser complied with that law to your
satisfaction?
18.
How much equity capital will you need to purchase the
franchise
and operate it until your income equals your expenses?
If
you can get the answers to each of these questions, and those
answers
satisfy you, then you're probably thinking of buying a
pretty
good franchise idea.
However,
if you're in doubt about any of these points, be sure to
check
it out and know the answers for certain before you invest or
sign
anything.
Buying
a franchise can give you a measure of security, and in some
cases,
sure fire profits.
Business
surveys show that fewer than 20 percent of all new
franchised
businesses fail.
This
is in comparison to a 60 to 80 percent failure rate for all
new
businesses started in this country each year.
Information
regarding specific franchising ideas can be found in
the
franchising directories, which are generally available at the
local
library.
Often
there will be a notice posted in franchise outlets
themselves.
If
you can afford the entry into this business, statistics are on
your
side.
You
are now armed with some caution and stop and go signs!
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