Alberta & BC Rockies Questions Before Buying A Business Franchise

15 Crucial Questions You Must Answer Before Buying A Business Franchise

Author: ajaero tony martins

In recent times, franchise businesses such as Wendy's, Pizza Hut, Burger King and McDonald's are booming. The entrepreneurs setting up franchise ideas and businesses have really discovered a gold mine and they are really promoting the idea vigorously.

Now buying a franchise is buying a business, so capital is going to be involved. I want to take you through a checklist of questions you must answer before buying a business franchise. So you won't bite your finger in regret.

Some business franchises are very good. They treat both the franchisor and the franchisee well. Others are one sided. But most of them are total rip offs because they make you pay ten to fifty times the actual value of the business idea, equipment, or whatever it is they are trying to get you to buy.

Before buying a business franchise, you should examine everything carefully, from the documents and paper work to the product. Infact, scrutinize everything. To help you out, i have prepared a list of questions you should ask and answer satisfactorily before buying a business franchise.

  1. Has your attorney examined the business franchise contract, discussed it with you, and do you both approve it without any hesitation?

  2. Does the business franchise require you to do anything or take any step that is illegal, questionable or risky in your city, state or country?

  3. Does the business franchise give you an undivided territory for the duration of the franchise period, or can the franchisor sell a second franchise in your territory?

  4. Is the your franchisor linked in any way with any other franchise company operating related products or services?

  5. If your answer to the above question is yes, what is your guard against the second franchising company?

  6. Under what conditions can you end the franchise contract, and at what cost will it be to you?

  7. If you sell your franchise, will you be compensated for your helpfulness or will it be a loss to you?

  8. How many years has the company offering you the business franchise been in operation?

  9. Does the company offering you this business franchise have a status for honesty and fair dealing among its franchisees?

  10. Has the franchisor shown any confirmed figures indicating exact profit of one or more of its members, and have you personally checked the figures with these franchisees?

  11. Will the franchisor provide you with a management training program, an employee training program, public relations and advertising program, credit facilities and merchandising ideas?

  12. If needed, will the franchisor help you in finding a fitting location?

  13. Is the franchising company strongly financed so that it can carry out its stipulated plans?

  14. Does the franchisor have experienced management?

  15. What can the franchisor do for you that you cannot do for yourself?

These are 15 crucial questions you must answer before buying a franchise business. Let me share 3 more franchising tips with you as bonus.

  1. Has the franchisor scrutinized you carefully enough to be certain that you can successfully operate a business and generate profit for both of you?

  2. Does your state have a law regulating the sale of franchises.

  3. If yes, has the franchisor complied with that law to your satisfaction?

  4. . How much equity capital will you need to purchase the franchise and operate it until your income equals your expenses?

If you can answer these questions satisfactorily, then you are on your way to buying a good business franchise. But if you are in doubt with any of these points, be sure to check it out and know the answers before you invest or sign anything.

Buying a business franchise can give you a degree of security, and in some cases, sure-fire profits. Business analysis surveys show that less than 20 percent of all franchised businesses fail. This is in contrast with a 60 to 80 percent failure rate for all new businesses started each year.

Information regarding specific franchising ideas can be found in the franchising directories, which are generally available at the local library. Often there will be a notice posted in franchise outlets themselves.

You can also purchase business books and guides that will help and give you more insight in buying and building a successful business franchise.

If you can afford the capital involved in buying a business franchise, statistics are on your side. You are now armed with some CAUTION and STOP and GO signs!

About the Author:

Ajaero Tony Martins is an entrepreneur and investor. If you find this article informative and you want to learn more, please feel free to visit my blog at and This article may be freely reprinted or distributed unedited in any Ezine,newsletter,blog, or website. The author's name,bio and website links must remain intact and be included with every reproduction.

Article Source: - 15 Crucial Questions You Must Answer Before Buying A Business Franchise

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