Create a Checklist before you Consider Purchasing a Franchise

 

  • Hire a lawyer and an accountant. 
     
  • Ask questions to understand all disclosures, franchise agreements, and other legal documents. Do not leave this only up to your lawyer to review, as it is very important for you to have an intimate knowledge of this information. 
     
  • Verify everything a franchise sales person says by asking for it in writing. 
     
  • Analyze your market and make sure there is a need for your product. 
     
  • Contact both current and previous franchisees and ask them for both the positives and negatives associated with owning a franchise. Ask the franchise company for statistics relating to success rates. 
     
  • Make sure you are appropriately funded. 
     
  • Meet the key management figures of each franchise company. This is especially important for smaller franchise companies. Do everything you can to get to know both the company's executives and their field representatives. 
     
  • Once you're well informed, and have chosen a franchise business to buy, cooperate with that franchisor and let them show you how to proceed. 
     
  • Remember, outside (bank) financing is available to help find your acquisition, including providing the funds needed to purchase the furniture, fixtures, equipment, leasehold improvements, inventory, supplies, and other turn-key assets. Banks will also provide extra operating expenses until it's profitable and self-supporting. 
     
  • But, not all banks offer small business loans. Some do, some don't. And, terms vary. So, shop several banks when looking for financing
     
  • Consider working with an experienced intermediary like FNBC.  They can provide advice about all aspects of your acquisition, from the initial search for your "ideal deal", through due diligence, financing, and Grand Opening of your new business.

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