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Things to Consider When Investing in a Franchise Opportunity

In the Information Center maintained by Franchise Direct, a host of resources are available so you can research aspects of franchising from investing in a franchise opportunity to some of the legal issues to consider following your investment.

Key areas for consideration include:

How Franchising Works: This link provides 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 some of the key traits to look for in a good franchise opportunity.

vetrans3.jpgSelf Assessment: Before you begin your journey toward investing in a franchise opportunity, consult this checklist to evaluate whether or not you are personally suited for franchising, and how it will impact your life and family.

Assessing Franchise Opportunities: Research a franchise opportunity thoroughly before investing. As well as assessing the business model, speak to existing franchisees about their experience with the franchise and meet with the franchisor to ask any questions you may have about the franchise opportunity face to face.

The FDD: The Franchise Disclosure Document is an extremely important document that tells you everything about a franchise’s operations, including any legal issues or financial problems the franchisor may be experiencing. Even though these documents can be quite lengthy, it is very important to read through the document to make sure you are fully informed before investing.

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. It is therefore very important that you read through this document carefully before signing and have a clear understanding of what can be expected of the franchisee-franchisor relationship.

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