There are many things you should research and consider before investing your finances into a franchise opportunity. Franchise Direct maintains a helpful information center, where you can obtain a lot of information on all aspects of franchising, investing in a franchise opportunity and legal issues following your investment. Key areas for consideration include:
How Franchising Works: This link provides you with a range of well researched articles on the basics of the franchise industry, including a history of franchising, definitions of terminology used in the franchise industry and key traits of a good franchise.
Self Assessment: Before you begin your journey towards investing in a franchise opportunity, you should consult this checklist to evaluate whether or not you are suited to franchising, and how it will impact on your life and family.
Assessing Franchise Opportunities: You should make sure you research a franchise opportunity thoroughly before investing. As well as assessing the business model, you should also speak to existing franchisees about their experience with the franchise, in addition to meeting with the franchisor to ask any questions you may have about the franchise opportunity face to face.
The FDD: The Franchise Disclosure Document (formerly known as the Uniform Franchise Offering Circular) is an extremely important document which tells you everything about a franchise’s operations, including any legal issues or financial problems which the franchisor may be experiencing. Even though these documents can be quite lengthy, it is very important that you take the time to read through the document to make sure that you are fully aware of all the details of the franchisor.
The Franchise Agreement: This is a legally binding document between you and the franchisor. The agreement stipulates in exact detail the rights and responsibilities of both parties involved. Therefore, it is very important that you read through this document carefully before signing.
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