How a Franchise Agreement and a Franchise Disclosure Document differ
There are two documents that are of vital importance...
You've probably heard what a serious commitment franchise ownership is several times, but it's a point that bears repeating. Like any other business, your new franchise is going to require your time, focus and money. With so much invested, you have to be certain you're making the right move at the right time before you sign your franchise agreement.
To be positioned for success during your franchise search, here are four questions you have to answer first.
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What is your dream deal?
If you could have everything you wanted in a franchise, what would that look like? Think about the industry, business model, business size, business format--the entire thing. Once you are able to honestly answer this question, you'll know what your franchise must-haves truly are. Use those must-haves to help guide you toward the right brand.
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What are the downsides?
Franchise brands have a lot of upsides, but they all have their own downsides, too. Before you move forward with a specific brand, you must determine what those downsides may be. If you are not sure whether any doubts you have about a brand are justified, be sure to jot down notes so you can speak to a franchise rep about your concerns.
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What is the level of need?
Signing on with a brand that has a future in your operating area is how you put yourself on the path for success. For example, if there are already a dozen pizza places in your area, even the best pizza franchise may struggle to gain business there. On the other hand, if there is only one oil change brand in the area and there's always a long line, that could signal a real need for another oil change place in your area. Research the area to determine what is already there and what may be missing; your new franchise should help fill a void, not overflow the cup.
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What is in the franchise agreement?
Your franchise agreement is one place where you don't want to find surprises later. You must read this document several times before you sign it, and you'll need to understand every single part of it. If you are not sure about parts of the contract, reach out to a franchise professional, such as an attorney who works with franchisees, for help.
Once you have real answers to the questions above, you'll be able to do a much more focused and informed franchise search. Always keep your answers in mind, and never settle for a brand you're not fully comfortable with.
