Additional Sources of Information
Before you invest in a franchise
system, investigate the franchisor
thoroughly. In addition to reading the
company's disclosure document and
speaking with current and former
franchisees, you should speak with the
following:
Lawyer and Accountant
Investing in a franchise is costly.
An accountant can help you understand
the company's financial statements,
develop a business plan, and assess any
earnings projections and the assumptions
upon which they are based. An accountant
can help you pick a franchise system
that is best suited to your investment
resources and your goals.
Franchise contracts are usually long
and complex. A contract problem that
arises after you have signed the
contract may be impossible or very
expensive to fix. A lawyer will help you
to understand your obligations under the
contract, so you will not be surprised
later. Choose a lawyer who is
experienced in franchise matters. It is
best to rely upon your own lawyer or
accountant, rather than those of the
franchisor.
Banks and Other Financial
Institutions
These organizations may provide an
unbiased view of the franchise
opportunity you are considering. Your
banker should be able to get a Dun and
Bradstreet report or similar reports on
the franchisor.
Better Business Bureau
Check with the local Better Business
Bureau (BBB) in the cities where the
franchisor has its headquarters. Ask
if any consumers have complained
about the company's products,
services, or personnel.
Government Departments
Several states regulate the sale of
franchises. Check with your state
Division of Securities or Office of
Attorney General for more
information about your rights as a
franchise owner in your state.
Federal Trade Commission (FTC)
The FTC publishes other information
that may be of interest to you,
including business guides like
Getting Business Credit and Buying
by Phone.
Buying Guide Index
|
