Starting a Franchise: Random But Important Questions to Consider
Having finished a conference call this morning with a well informed client about his business and the Franchise System that we are establishing‚ a number of random‚ but nevertheless important‚ questions came to mind. These questions (plus many others) are outlined in the interactive questionnaire that our start-up franchisor clients complete. A few of the many questions or factors that your should be considering – if you wish to franchise your business – include:
Specifications for Proprietary Equipment – if your business features or utilizes specialized or highly visible equipment (whether a specialized oven or a medical testing device‚ consider what specific models that the franchisee will be required to purchase and what suppliers will you approve as your exclusive suppliers.
Point of Sale Systems – If you use a point of sale system or will be requiring your franchisees to use one‚ be aware that your FDD will require detailed disclosure of the point of sale system that franchisees will be required to purchase. This detail must include‚ equipment model numbers and also software version numbers.
Proprietary Products – Note every ingredient‚ product or service is "proprietary". However‚ your business does possess proprietary components and it is critical that you evaluate those critical products‚ services and/or ingredients that are so critical to your business that you must designate them as "proprietary" and control the sale and distribution of these items to your franchisees. Consider whether or not suppliers may even private label these items with your trademarks and trade name.
Training – Although your franchise attorney will review with you the "technical" FDD disclosure requirements‚ start writing down the training program that you will implement and require all franchisees to complete "prior" to opening their franchise. Consider that a good training program is critical to the success of a franchise.
There are many other factors‚ but these should provide you with a good start. Also‚ one important tip: write down your answers‚ review your answers and‚ if necessary‚ modify your answers.
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