Chapter 1 Lesson 4: The Franchise Purchasing Process

So, in the prior lessons we learned about the franchising basics and important franchise terms. In this lesson you will learn about the actual “franchising process”. That is, the step-by-step process that many current franchisees have followed or should have followed before buying a franchise and before signing a franchise agreement. So, if you have identified a franchise that you are very interested in, have spoken to the franchisor’s salespeople and have received some information from them, what’s next? Well, learn more in this video.

Lesson Summary

You should have or will be receiving a large document called the Franchise Disclosure Document, also referred to as a FDD. The FDD contains information about the franchisor, franchise opportunity that you are buying, your rights as a franchisee and, most significantly, your obligations as a franchisee.
The next step would be to work with a competent and experienced franchise lawyer. When you do this, you should be engaged in a dual track. That is, your should be evaluating the FDD and Franchise Agreement and he or she should be giving you some assignments. You will get some recommended steps that you should be taking to advance your due diligence (more about due diligence in Chapter 2) and your evaluation of the particular franchise opportunity.
If there are red flags or the opportunity is not what it appears to be, then in that case, your best decision may to be to walk away from the transaction.

In Lesson 5 we discuss how long it typically takes to buy a franchise.

Table of Contents

Top Resources for Franchising Your Business

Should You Franchise Your Business?
Franchising may be the next big step for your business and brand. So, how do you know whether or not you should franchise your business and if franchising is right for you? The answer depends on your business, your business goals, your personal goals, your budget and where you want... read more
How to Franchise Your Business
In this guide you’ll learn the basics of franchising, how to franchise your business, and how to win at franchising. We’ll also take a deeper dive into legal requirements for franchising and why they matter, steps to take before and after you launch your franchise, and even some tips on... read more
Franchising vs. Licensing Book
When considering expanding a business both franchising and licensing are possible options. In this guide, you'll learn the differences of franchising and licensing and understand how each will affect you. read more