The Costs of Buying and Owning a Franchise
Make sure you are prepared to make an investment of a large magnitude before you buy. Compare your estimates with the estimates of other franchise chains. Will you get a better deal from a competitor’s franchise?
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Checklist for Comparison Shopping
According to the U.S. Department of Commerce, buying a franchise is the average persons most viable avenue to owning a business.
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Contact Listings of Regulatory Agencies and Industry Associations
Us Franchise News recommends that investors contact both these and other regulatory agencies and industry associations in researching potential franchise investments.
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Important Questions to Ask Present or Former Franchisees
Call and visit several branches of the franchise. It is important to see how they operate. Be considerate of the franchisees you talk with. They do not have to talk with you and it would be unfair to expect them to spend time with you during their busiest hours.
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What You Need to Know About Dispute Resolution
Both the franchisor and the franchisee will probably want to settle any disputes in the least costly, least time-consuming, least adversarial way possible. One option is arbitration
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Franchise Renewal, Termination and Transfer
If you are content with the level of business you are doing at your unit of the franchise, you will probably want to renew your franchise agreement.
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Advertising Fees- Beneficial or Excessive?
Most franchisors require franchisees to give a certain amount of money each year to the franchisor for national advertising campaigns. This is a perk of being part of a franchise, since most local businesses cannot afford to advertise on the national or even the regional level.
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Earnings Claims Requirments of the Franchisor
The franchisor is not required to include an earnings claim in the UFOC. In fact, according to the book, Franchising for Dummies 2 only about 25% of franchisors do so.
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Rights and Responsibilities of the Franchisee and Franchisor
The franchisor must also disclose any revenues or other benefits it received as a result of any required purchases or leases. Don’t forget that there are many costs not paid by the franchisor. Be sure to include these in your financial estimates.
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Frequently Asked Questions about Franchising
What is a UFOC? What is the regulatory framework governing franchises?
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Tips for Prospective Franchise Purchasers to Remember
Make sure the seller of the franchise supplies you with a copy of a prospectus approved by the Office of the Attorney General and that you read it carefully.
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The Truth about Legitimate Franchises: What Every Investor Needs to Understand
One reason why many franchises are so successful is because the system creates a certain synergy. Businesses brought together under one trademark can achieve things not possible for individual business people, such as group advertising and buying power.
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Warning Signs that You Might Be Getting Involved in a Fraud
Failure to Disclose All Necessary Documents and Details
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What to Consider Before Buying a Franchise
Don’t Let This Happen to You. The terms of the deal were clear.
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Its Better To Pay Franchise Royalties Then to Go At it Alone
It is actually something I have wondered. I’m sure most other people have had the same question:Do I have a better shot at higher profits through a franchise or from doing it on my own? Mostly, the fear comes from paying out franchise royalties. Jim Deitz puts it perfectly in his Franchise Doctor’s Blog:
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