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Essential Franchise Information
To buy a franchise...or not to buy a franchise...that is the
question...The following information should help you find the
right answer!
Making the decision to purchase a franchise needs to be given
serious thought, research and consideration of all options
available.
Franchises have experienced annual growth of more than 50% - and
are now also popping up in airports, railway stations and inside
supermarkets.
There is intense competition for new franchisees -so don't bow
to pressure to sign on the dotted line - until you are 110%
certain that your decision is the right one for you.
With the huge choice of what to go into - home services,
personal services, financial services, retail, fitness, food,
health and beauty, etc, etc - ensure that the one you choose is
aligned with your existing skills and something that you have a
genuine interest in.
Attend franchising seminars and collect all relevant information
and data. Make sure you ascertain details on: upfront franchise
fees; training fees; location fees; and ongoing franchise and
advertising fees.
Find out how long the franchisor has been operating; what
training and support they offer; what track record they have;
are they financially stable; do they undertake demographic
checks on potential sites; the success rate of existing (and
past) franchisees; and how much control they exert.
Remember - there are no guarantees when purchasing a franchise -
success in one location does not automatically ensure success in
another! Your franchise may not become the immediate gold mine
that you envisaged -it may take several years before you even
reach breakeven.
Analyze your costs and know your numbers: what is the ratio of
the rent to turnover; salaries to turnover; fixed costs to
turnover. If you are borrowing the start up costs - make sure
you factor in your loan repayments. Research the best method of
borrowing the money - a business loan, a business mortgage loan,
interest and principal, interest only??
Be aware that if you fail to follow the guidelines as laid out
in the contract - the franchisor may, with warnings, terminate
the franchise agreement.
Ensure that you get written substantiation to cover any earnings
representation.
And - most important - seek EXPERT LEGAL ADVICE - before signing
anything!
About the author:
Gay Redmile is the webmaster of several finance and investment
sites. She has her own retail franchise business and therefore
understands the importance of doing your homework before
purchasing a franchise. Visit her site at
http://www.franchisingsite.net for more information.