The meetings between franchise and prospective franchisee are set up for each to get to know as much about the other. For the franchiser, evaluating the prospect in key points such as business background, work attitude, available resources and the like are of paramount importance. For the franchisee, often inexperienced in such meetings, the following is a guide to help you make the most of your franchise meetings.
It is a must that you be ready with questions you would like to ask and points you would like to clarify. Here’s a quick rundown of what you, as an aspiring franchisee, should know about the company before signing on the dotted line:
- The history of the franchise and its officers and directors (Include what business they previously engaged in, their educational background, other business interests, and how long they have been with the company)
- A complete description of the business to be franchised (History, Mission Vision, Business Plan, Store Operations, etc).
- All costs and fees that you will be subject to under the agreement (Franchise fees, Royalty fees, Marketing/Advertising fees, Construction fees, Total Package cost).
- All obligations of either party to the other during the term of the agreement and thereafter (Very important to have in black and white so there will be no confusion as to what each party expects from the other).
- Any relevant litigation history of the company or its officers.
- Any business failures, ownership transfers, franchise agreement terminations of other potentially adverse information relating to the success rate of the existing units in the system.
- Audited financial statements for the previous three years for the franchise company.
- A list of the existing franchisees (including how long they have been franchising, how many stores they own, and contact information).
- A complete copy of the actual franchise agreement.
Author: Armando Bartolome of The Manila Times