A Little to Consider When Thinking of Buying into a Franchise
There are many successful businesses in the United States and the world. These businesses might consider expansion by means of franchising out their business. What a franchise is, is a license from the franchiser to conduct business under his or her business name. The entity you purchase will have many opportunities for you as a business owner.
Franchised businesses offer a business model where you are in business for yourself, but not by yourself. The franchiser will assist all franchisees in opening new locations using the business name of the franchiser. The franchiser will offer advertising and training to the franchisee.
Whether to go into business as a franchise owner is often a complex decision. There are many factors that will influence the decision-making of a franchise owner. Some of these decisions to consider will be how much can you afford to invest, how much can you afford to lose, how much profit does it appear you will be able to make as a franchise owner.
The franchiser is obligated under federal law to disclose any information on their business opportunity. This disclosure is entitled the Franchise Disclosure Document. You should not have to ask the franchiser for this document. The franchiser should automatically provide you with either a hard copy or a digital copy.
The franchiser is usually paid a fee by the franchisee to operate the business under the franchiser’s name. Franchisees will usually pay the franchiser royalty fees based on the gross sales of the goods or services it provides using the franchisers business name.
The franchiser is someone who will offer new entrepreneurs a business opportunity. The business opportunity will often entail filling out an application to become a franchisee. Once the application is accepted the franchiser will then begin drawing up the contract for the franchiser and franchisee agreement. As a potential franchisee you are under no obligation to sign the franchiser and franchisee agreement.
You can request an updated Franchise Disclosure Document. The franchiser will generally update the Franchise Disclosure Document several times throughout the year. Reviewing an updated one prior to signing the franchiser and franchisee agreement is a good business practice. This might not be the correct opportunity for you.
There are a number of business opportunities available for anyone looking to franchise, such as Mrs Fields cafe’s for sale. The franchiser will make every effort to supply you will all necessary business equipment to begin operating under the corporation’s name. You will complete and sign the franchisee application.
It is at this time that the franchiser will supply you with either a digital or hard copy of the Franchise Disclosure Document. This is not an option the franchiser will be given. The franchiser must under federal law provide potential franchisees with the Franchise Disclosure Document.
There is a right and an obligation on the part of the franchisee to get the advice of an attorney and an accountant. The franchisee might want to do this prior to investing in the business. Do your research it could save you from making a bad business decision.