Date published: 13 June 2019
Summary: There are some key steps you should always take to know the risks before signing a franchise agreement or paying money. This includes understanding key documents, talking to other franchisees and ex-franchisees, seeking professional legal, accounting and business advice from franchising experts.
Transcript
Buying a franchise.
It's been your dream, and you can't wait to get started, but are you ready to sign?
Buying a franchise business is a big decision.
It could be as big as buying a house.
It's wise to be informed, as your life savings could be at risk.
Know what the risks are to avoid heartache.
Before you decide to buy a franchise, you will get some important documents from the franchisor.
One of these is a disclosure document.
This will include important things you need to know about the franchise.
Another important document is the franchise agreement.
This is a legally binding contract between you and the franchisor.
It's important because it says what you can and can't do when running the franchise.
So you have a lot to read, but it is important to go through and understand the documents.
If you don't understand something, you can ask the franchisor.
Next, talk to the professionals.
An independent lawyer, accountant, and business advisor can give you advice about the franchise.
Make sure they have franchising experience.
You should also talk to other franchisees who've bought into the same franchise, both current and former franchisees.
Contact details for other franchisees must be in your disclosure document.
Get in touch and ask them whatever you need to.
You should ask current franchise owners what's the work like? Any unexpected costs? Recommend it?
When talking to former franchisees, ask was it a good investment?
It's also a good idea to ask why did you stop being a franchisee?
It is your investment.
Before you sign, research and get professional advice to understand what's right for you.
For more information, visit the website.