You have identified a franchise concept that you are extremely interested in. You have met with the franchisor’s sales staff‚ completed an application and are impressed‚ so far‚ by what you see. However‚ before taking that next step‚ before paying a franchise fee or signing a franchise agreement‚ contact existing franchisees to get the “inside track”.
In the franchisor’s disclosure document (also known as the “FDD” and formally known as a Uniform Franchise Offering Circular) that must be provided to you by the franchisor at least 14 calendar days prior to you signing a franchise agreement or paying any fee to the franchisor. The FDD is an extensive document and‚ quite frankly‚ one of the few “life-lines” that will be available to help you make a true assessment of the franchise opportunity that you are considering. The legally mandated information contained in the FDD‚ and thereby disclosed to you as a prospective franchisee‚ is extensive‚ extremely relevant and should be reviewed with both a franchise lawyer and business accountant. However‚ sticking to the point of this article‚ that is obtaining information from existing franchisees‚ please know the following:
When purchasing a franchise‚ there is a lot to consider and‚ inevitability – like every entrepreneur‚ you are bound to make mistakes. However‚ by contacting existing (and terminated) franchisees you can learn from some of their mistakes and cut down on your own. When buying a franchise‚ I recommend a thorough due diligence process and learning what steps to take and mistakes to avoid when buying a franchise.
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