How to minimize risks when buying a franchise

What you need to do before purchasing a franchise is to minimize the risks.

Experts advise entrepreneurs who are thinking about acquiring a franchise to approach the choice of a potential franchisor partner as carefully as possible. Use only reliable resources, which provide the most complete information about the offers of franchising companies. If possible, visit a specialized exhibition dedicated to franchising (such exhibitions are regularly held in the capital). Deal directly with the franchisor, and not with numerous intermediaries and agents who charge money for their services, but do not give any guarantees.

The more information you can find out about the franchisor in the media and on the Internet, the better. Be sure to visit the headquarters of the parent company and, if possible, its retail outlets/production, and ask for a copy or number of the trademark registration certificate. You can check these data for authenticity on the website of the Federal Institute of Industrial Property (FIPS). When studying sources of information, pay attention to analytical articles and reviews, and to the opinions of former and current franchisees of the company you are interested in, which can be found on various thematic sites and forums. These opinions can be much more useful to you than official data. You will see what the partners of the company you are interested in like and dislike, what are the real payback periods and profits, and what difficulties you may encounter in the process of work. Feedback from real franchisees can also be obtained directly from the latter. If the franchisor refuses to provide you with the contacts of its partners, this also says a lot. However, you can find this information on your own on the Internet or with the help of a patent attorney who will search the database of registered trademarks and service marks.

Even the official history of the company will tell a lot: the year the company was founded, the year the franchise program was launched, the number of franchised enterprises and their location, and the number of own enterprises. A company that was founded less than a year ago and started selling franchises half a year ago is hardly credible. It takes at least 1.5-2 years to debug the franchising system.

Review the financial terms of the franchise. Experts believe that the best option is a small lump-sum fee (or even its absence) and a high royalty rate. This means that the franchisor is confident and interested in the development of your enterprise because its profit directly depends on your success.

At the next stage, read all the documents – the franchise agreement and the franchise book. What does the franchisor mean by support, what does he give to his partners? Beautiful design, colorful pictures, and impressive diagrams in presentations, although they command respect, may not have anything significant in their basis. In addition to the transfer of printed materials, the franchisor must provide training to its partners. This training also includes training and seminars for employees of the franchised enterprise. Do not be afraid of control by the franchisor. But this control must also be accompanied by support in all areas of the franchisee’s activities.

The commercial concession agreement is a single and clearly formulated document. It cannot be replaced by other separate documents or packages of documents, it cannot be transmitted by letters, faxes, and other correspondence. The main condition of the franchise agreement is the transfer to the user of certain rights belonging to the copyright holder. The exact list of transferred rights may change, but they must include the right to use the trade name and/or commercial designation and the right to use protected commercial information that the user needs to exercise the rights transferred to him. In the contract, the right holder must indicate the actions that he undertakes to take to provide the user with free access to the necessary commercial information. Also, the contract must indicate the duration of its validity, the amount of remuneration that one party pays to the other, as well as the procedure for its payment. Failure to comply with these conditions (lack of the specified period or incorrect wording) may become the basis for terminating the contract of one and the parties and terminating the conditions for its implementation on their part. Of great importance is a clear description of the responsibilities of the parties and an indication of cases when certain actions can be regarded as a violation of the terms of the agreement.

The contract is submitted to the registration authority in three copies, which are recommended to be signed on each page. The registered contract has a corresponding mark on the first page indicating the registration number and date.

personal loan student loans home loan car loan car finance home equity loan capital one auto debt consolidation loan reverse mortgage business loan short term loans quick loans home equity line of credit heloc mortgage broker best mortgage rates small business loans national student loan mortgage loan auto loan va loan discover personal loans us bank mortgage heloc rates best personal loans personal loan rates sofi loans va home loan home improvement loans wells fargo student loans housing loan capital one auto loan capital one car loan home mortgage rates discover loans prosper loans private student loans personal loans online student loan consolidation hard money lenders personal loan apply best mortgage lenders aes student loans sofi mohela quick cash loans sallie mae student loans stafford loan loan consolidation mortgage lenders va loan rates direct stafford loan home equity bad credit auto loans mortgage pre approval paypal working capital equity loan term loan bmo mortgage rates refinancing best home loan rates second mortgage mortgage companies heloc loan government student loans instant cash loans best personal loan rates best student loans the lending club rocket mortgage rates home loan interest quicken loans rates refi credit consolidation low interest personal loans 0 car finance business line of credit home equity line of credit rates renovation loan lowest mortgage rates personal loan online apply bankrate mortgage grad plus loan lightstream loans auto finance citizens bank student loans mortgage broker near me navy federal auto loan sofi personal loan upstart loans apply for student loan va home loan rates school loans tsp loan costco mortgage equity line of credit hard money home mortgage newrez mortgage fed student loan college loans home renovation loan bridging finance hard money loans used car finance sofi student loans bad credit car dealerships apply for student finance commercial loan low apr loans business loan interest rate mortgage companies near me direct plus loan lending tree loan hecm refi rates pnc mortgage rates mortgage lenders near me refinancing mortgage toyota financing 2nd mortgage unsecured business loans navy federal car loan flagstar my loans working capital loan asset based lending graduate plus loan plus loan business loans for women car finance company my quicken loans pnc student loans paypal business loan student loan refinancing firstmark student loans chase student loans bad credit no money down car dealerships near me business loan rates mortgage company mortgage finder jumbo mortgage sallie mae loans auto loan bad credit instant approval usaa home loans my cornerstone loan discover home equity loans mortgage lender best home loans nfcu mortgage rates lightstream auto loan quicken loans mortgage rates second mortgage rates best heloc rates refinancing a home navy federal personal loan american express personal loans nslds professional getting a mortgage navy federal student loans student loans without cosigner best home equity loans homeowner loans my student loan sallie mae personal loan pre approved loan best egg loan buying a car with bad credit fafsa parent plus loan federal perkins loan call navient va loan interest rate commercial lending student loans for college best mortgage rates today debt consolidation loan bad credit mortgage prequalification bad credit business loans usaa car loan rates loandepot loanadministration lending club loans car loan eligibility quick personal loans best private student loans lowest home loan rates pre approved car loan no credit check car loans lowest home loan interest rate direct stafford loan estimate best personal loan companies auto loan pre approval firstland mortgage best small business loans low rate loans home loan pre approval sofi mortgage nmls consumer guaranteed car finance va loan eligibility pool loans investment property mortgage rates quicken loans rocket mortgage reverse mortgage loan refinancing home loan 2nd mortgage rates cheapest mortgage rates guaranteed rate mortgage earnest student loans heloc interest rates mortgage protection quick easy loans lowest personal loan rates va irrrl servicehomeloan best home equity loan rates best home loan interest rates best mortgages private mortgage lenders apply for fha loan business loan eligibility revolving line of credit mezzanine loan bad credit car dealerships near me no credit car loans bad credit dealerships subprime auto loans car dealerships bad credit no money down reddit student loans poor credit car finance citizens one mortgage best home equity line of credit federal subsidized loan commercial real estate loans granite student loan earnest loans quicken loans mortgage finance broker car loans for people with bad credit becu mortgage rates historical mortgage rates mortgage approval cash out refinancing cheapest home loan va mortgage amex personal loans best 15 year mortgage rates equity mortgage capital one auto pre approval parent plus cheapest personal loan consolidation loans for bad credit best short term loans commercial property loan pnc bank mortgage irrrl recourse loan online mortgage broker lending express,