How To Start A Small Business Franchise Opportunity
There are benefits, responsibilities, costs and risks in establishing a small business franchise opportunity. There are many important steps along the way to consider when researching a franchise business. If you complete those steps thoroughly, you can be confident on becoming a member of a growing, healthy franchise system.
Buying a franchise may reduce your investment risk by introducing you to an already establish company. The franchise fee can be substantial. There are also fees for insurance, licenses, advertising, royalty fees, utilities, etc. There really is no way to compare costs and fees for any two franchises because no two are the same.
When the word “franchise” comes up, the first thing that usually comes to mind is a franchise in the fast food business. Today the selection of a franchise can be from a computer in your home to a stable at a farm. Therefore, the fees cannot be compared as a ‘one size fits all’ as they have been for years.
And some major don’ts when considering a franchise: don’t buy a franchise without your lawyer and accountant reviewing and approving all documents, rely on information from other franchise or selling agents, be in a rush (because the right opportunity will come), deal with an inexperienced franchiser, and rely on any future predictions.
Continuing with additional don’ts: permit any “expert” to decide for you whether or not you should buy any franchise, hesitate to walk away from a deal that is not a potential home run, rely on the seller’s evaluation of inventory and any other asset, and don’t overlook comparing what you can do verses a franchisee.
If you are communicating with the salesperson and he is telling you one thing but the contract says nothing about it, the contract counts. If the seller recedes at putting oral promises in writing, be alert. Even consider doing business with another firm.
This disclosure document includes: names, address and telephone numbers of previous purchasers who live closest to you, a fully audited financial state of the seller; background of the business’s executives; cost of starting and maintaining the business and the responsibilities you and the seller will have to each other.
If the seller does not give you a disclosure document check with your attorney or accountant. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to help the consumers. Check with a professional before you sign any documents.