Questions To Ask Before Signing A Franchise Agreement
posted in Bricks and Mortar Business |Starting a franchise business is a very important decision that can change your whole life. You use your savings to invest in a franchise business for sale offer. So, be very sure about the franchisor before you sign the franchise agreement. Even if you have done due diligence, there is no harm is asking these pertinent questions:
• How long and where will the training be given? The training is one of the most important parts of starting a franchise. The success of the franchise business will depend on how well the franchisor teaches its business model to the franchisee. Hence, ask about the length of the training period. Top franchises generally have a two-week long training period. Another important thing to know is where this training will be given. You must have theoretical as well as practical training.
• Will there be any other fees? The franchisors generally have franchise fee, royalty fee and advertisement fee. And all of these will be mentioned in the franchise agreement. Still, try to make it as clear as possible, so that you don’t end up paying any hidden fees.
• Are you giving exclusive territory? This point will be mentioned in the FDD, but still you can double check with the franchisor by asking this question. Remember, your franchisor may sell the product in your territory through the Internet or by direct mail. That will also eat into your profit. So when you inquire about the exclusiveness of your territory, don’t forget to ask this point as well.
• Do you allow franchisee associations? Many franchisees, no matter which franchise opportunity they belong to, are increasingly bonding together to fight unscrupulous franchisors. Any genuine franchise concept will allow its franchisees to join such an organization. So, ask whether you, after starting a franchise, can join franchise associations like American Association of Franchisees and Dealers.