PRESENTATION OUTLINE
Franchise Research Tips That Would Make Sherlock Holmes Proud
When you’re researching a franchise investment opportunity, you need to employ many of the same skills to search out franchises that are going to be a great fit for you personally and professionally. You also want a franchise that’s going to prove lucrative for you in the short and long term.
To pull off this feat, you’ll probably need to ask a few tough questions of yourself and of the franchise to which you’re taking a magnifying glass, perhaps in the style of the nineteenth-century protagonist mentioned above. A great place to start your investigations is with the franchise disclose document.
Topics of Discussion
- Clue #1: The Franchise Disclosure Document
- Clue #2: Ask Compelling Franchisors Pointed Questions
- Clue #3: Watch Out for Any Inconsistencies or Dubious Claims
1. The Federal Trade Commission requires franchisors to provide prospective franchisees with a franchise disclosure document at least two weeks prior to the franchisee signing any contacts, making any payments to the franchisor, or making payments to an affiliate of the franchisor. A franchise disclosure document is a fantastic place to start your Holmesian investigation of a franchise because the franchise disclosure document furnishes you with background information on the franchisor, associated costs of going into business with the franchisor, legal obligations that might apply to you and the franchisor, and audited financials.
2. You’ve no doubt done a soul-searching self-evaluation by now and taken the time to assess your own financial situation in light of the fees and financial opportunities laid out in the franchise disclosure document. One brand or franchising opportunity might be standing out at this point, but are there other questions you should be asking? Absolutely. You want to find out how well this franchise is rated in its own category (such as baked goods) according to leading publications like Entrepreneur magazine. You then want to do a point-by-point comparison of franchises in the subcategories on which you’ve focused to find out which is the best opportunity for you based on financial, personal, and lifestyle considerations.
3. Sherlock Holmes was anything but gullible. If you want to show the same investigative acumen, then make sure that you double-check item 19 on your franchise disclosure document to ensure that “off-the-record” earnings promises are corroborated by the evidence.
Disclaimer: This information is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for information purposes only. Currently, the following states regulate the offer and sale of franchises: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Oregon, Rhode Island, South Dakota, Virginia, Washington, and Wisconsin. If you are a resident of or want to locate a franchise in one of these states, we will not offer you a franchise unless and until we have complied with applicable pre-sale registration and disclosure requirements in your state. Franchise offerings are made by Franchise Disclosure Document only.
