If you are interested in purchasing and operating a franchise business, but are new to the world of franchising, where can you find good franchise information? Luckily, finding reliable franchise information is now relatively easy to do with the advent of the Internet. Unlike starting your own original concept business, a franchise business is attractive because many of the key issues of running a business have been resolved, or at the very least, addressed. It is important that you seek out as much franchise information as possible before you invest in a franchise business. You'll find that with extensive research of the franchise you are interested in; most of your questions will have already been answered by the time sign the franchise agreement form.
Carefully Research The Franchise Opportunity
The best place to find accurate and detailed franchise information is to visit the business' corporate website. If you are interested in buying a franchise from a relatively large and well-known business, the corporate website is the first place you should go to do research. Franchising businesses are highly regulated. Corporations are required by law to provide accessible and accurate information regarding their business profile and franchising requirements and fees. You should be able to gain access to information that details the initial franchise fee, estimated operational costs, and any other fees that the company may have. A good company will also be able to provide you with other figures as well, such as costs for marketing, insurance, supplies, lease or rental, and other estimated costs.
According to the Federal Regulation and Trade Commission, all businesses offering franchises for sale must provide potential franchisees with a disclosure document ten days before you are required to pay the franchise fee or any other type of fee that commits you to the purchase. The disclosure document is very detailed. At minimum, it should contain the following information:
The names, addresses, and telephone numbers of at least ten individuals or companies that have purchased a franchise from the company. These franchisees should be located in an area close to you.
The disclosure document should also contain a financial statement from the franchising business that is fully audited. The disclosure statement should detail the cost of starting and operating the business, as well as a list of all the responsibilities each party (you and the seller) will have as part of the purchase and operational practices of the business.
The disclosure statement will also contain detailed information regarding the background and experience of the franchising business executives. If the business you are interested in does not provide you with a detailed disclosure document, you may want to consider going a different route.
Finally, the best way to really learn what it's like to be an owner of a business franchise is to speak with current or previous franchisees. Ask them about their experience in working with the franchise's business personnel. Ask whether they would categorize their experience as a positive one. Also, make sure to see if the true operating costs of running the franchise are close to the estimations provided by the franchising business.