Questions to be asked before buying a franchise
If you have already selected the industry in which you want to own a franchise and have short listed a few franchisors, than this is for you. Before finalizing on one of these franchisors, a few important questions need to be asked to the franchisor. We give you a list of questions that should definitely be put to the franchisor
• Exclusive rights Is the franchisor providing you with exclusive rights over a particular area? And if yes, then for what duration?
• Assistance In which all activities will the franchisor assist you? E.g. Public Relations, employee training, maintaining records etc
• Business plan Does the franchisor have a business plan and does he have enough resources to finance it? You should be allowed to have a look at that plan.
• Royalty Fees and commission How much royalty has to be paid monthly and what percentage of sales has to be paid to them as commission?
• Intellectual Property Rights To what extent can the franchisee use the logo, trademark etc of the franchisor? Does he have to pay separately for this?
• Termination Can the franchise contract be terminated and if yes then under what circumstances? What will be the notice period and compensation?
• Legal permit Does the franchisor have a legal permit to run a franchising business in your area? Does the franchisor comply with the law?
Only when you get satisfactory answers to these questions should you go ahead and invest in a franchise.