Thinking of buying a food franchise? They are superhot and popular moneymakers. Before you take the plunge, study this list of questions to ask your potential franchisor:
Ready to contact a franchisor in the food industry to discuss become a franchisee? To make sure the ‘fit’ is right, ask the franchisor the following questions:
o Does the franchisor staff attend seminars on franchising and management?
oDo field consultants offer help and guidance or merely act in a regulatory role?
- How many franchises are expected to be added each year?
- Where will they be located?
- What is the success rate of existing franchises?
- What method is used to protect franchisees from poorly performing franchises?
- Is there a franchise owners association?
- Is there a franchise advisory council?
- Who owns the trademarks, service marks, etc., and are they federally registered?
- Are there any disputes pending or threatened against the trademark.
- Has the franchisor complied with the FTC and state disclosure laws?
- Are any senior management or key personnel leaving the system?
- Does this company compete with the franchisees in the marketplace?
- Will the franchisor finance any of the costs?
And finally: Is the franchisor willing to negotiate the terms of the franchise.