Ten years ago, my hubby bought a food franchise. In those days, franchising was still a pretty new concept and it was also a popular option for people who want to become entrepreneurs or their own boss. Due to the lack of support from the franchisor, the business was not thriving and after six years, he and his partner decided to call it a day.
Before putting any money into a Franchise, you should investigate everything completely. Here’s a list of questions you should be asking, and should get satisfactory answers to before investing.
1. Has your attorney studied the franchise contract, discussed it completely with you, and do you both approve it without reservations?
2. Does the franchise require you to take any steps which are either illegal or even border on illegal, or are otherwise questionable or unwise in your state, county or city?
3. Does the franchise opportunity give you an exclusive territory for the length of the franchise period, or can the franchisor sell a second franchise in your territory?
4. is the franchisor connected in any way with any other franchises handling similar products or services?
5. If you answered yes to the above questions, what is your protection against the second franchising company?
6. Under what circumstances can you end the franchise contract, and at what cost to you?
7. If you sell your franchise, will you be compensated for your goodwill or will it be lost to you?
8. How many years has the firm been offering you the franchise been in operation?
9. Does the company offering you this franchise have a reputation for honesty and fair dealing among its franchisees?
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