Franchise Agreements - 6 Things to Do Before You Sign One
Before you become a franchise business owner, you need to do your homework. After all, starting a franchise is a lot of work. You need to make sure that you're making the most out of your time!
If you want to make an educated decision, there are 6 things you need to do before you sign a franchise agreement:
1. Make sure you're a good fit for the industry
It's a common fact - people work harder when they're genuinely interested in what they're doing. Before you start up a franchise, make sure that you're not going to be bored with the work. After all, starting a new franchise takes a whole lot more work than just 40 hours a week!
2. See what other people have to say about your potential franchisor
What kind of reputation does the company have? Other franchisees can tell you how the corporate office treats its co-workers. And, competitors can tell you what kind of respect the company garners in the industry.
3. Find out how much it's going to cost
Franchisees don't just spring for the start-up costs and move on. Depending on the company, you may be bound to annual or monthly fees or even ad-hoc financial commitments. By investigating all of the money obligations now, you won't have to deal with any surprises later.
4. Figure out what kind of support you're going to get from up top
A good corporate office will provide new franchisees with plenty of support - like marketing assistance, setting up IT equipment, helping you recruit employees, and training a new staff. If you have to do all of that yourself, starting up a franchise may be much tougher than you originally thought.
5. Ask about the systems that your potential franchisor uses
Are their computer systems hopelessly out of date? Do they seem to ignore advances in technology? Something like an email system may seem basic enough, but if it's too hard to use, it can affect the productivity of your entire franchise.
6. Take your time to review the franchise agreement
Once you've figured out that this is the franchisor you want to work with, don't rush to sign all of the paperwork. Instead, go over it carefully, and make sure that you understand all of your obligations - and that you understand exactly what the franchisor is giving you in return. If you're uncomfortable with something in the agreement, talk about it before you sign it!
If you don't feel comfortable wading through the fine print on your own, have a lawyer take a look at it. Or, you can always get more information with an appropriate regulatory body.
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