Buying the franchise is always a matter of huge investment. Before signing under the dotted line, you have to make sure that it is worth the investment and effort.
Moreover, the success scope must be higher as well. Along with that, you need to consult with the American Franchise Attorney to calculate the chance and risk of litigation with the franchisor.
Here are some questions that you need to ask before purchasing the franchise.
• When did you start the business?
Before investing, you must know everything about the brand. It will help you to get a perception regarding the main idea behind starting the business.
• After how many years you transform your business into a franchise model?
When you get to know that how many years the business ran as an independent body and the initial structure, you will get to know the growth it has during these years.
• For how long the franchise is running?
It is another important question to know whether the franchise is new or old enough that is running the business for years.
• Tell me something about the founder member of the franchise?
You must be aware of the ideology and visions of the founder member who started the franchise. If possible meet him/her and have a detailed discussion about the goal and business model.
• What are the actual products or services they are selling?
You must know what is the real product or service that they are selling so that you can design your business accordingly. For example, Pizza Hut is selling pizzas but some other level it is selling the service, quality, and brand value associated with it.
• What is the expected time period to earn profit from the business?
As an experienced franchisor, they must know the potential timeline to earn a profit. It will help you to plan in a better way.
• Can you get a chance to negotiate the FDD?
It is a very important question to decide the future with a particular franchise. Not every franchisor allows to have negotiation over the Franchise Disclosure Document but some can do that. Consult with the International Franchise Attorney to have the best deal for you.
• What is the biggest competition in the market?
As the franchisors are for long in business, they have a clear idea about the level of competition they are having. You also must know their USP to take a stand in the competition.