Buying a franchise as a business idea can be both good and bad. If you have had absolutely no previous business experience with a bit of guidance from a good Lawyer or business advisor can be a great way to start a business. But as with all businesses you still need to be aware of certain aspects of business that aren’t always apparent but need to be looked out for. This is the job of a good lawyer or solicitor who specialises in small business franchising.
As is the case with all businesses, the franchiser is also in business and looking to get the highest return on their capital invested. So for the unwary franchisee, you could end up legally trapped in one or more aspects of the franchise that doesn’t suit you or your locality.
What you are buying with a Franchise
It is important to be very clear on exactly what you are buying with a franchise. Unless everything is clearly defined so that you are very clear on exactly what the franchisor is selling you, you may have expectations that aren’t going to be met.
For example, if you are expecting business training on how to market your business, this needs clarification in writing as to precisely what, how, when and where and why the training will be given. If the franchisor gives the training away from your area and this training goes for a week or more at a time, can you really afford to be absent from your fledgling new business for a whole week?
Does the Franchise include a dollar figure for marketing?
Some franchisors will include a set dollar figure to put towards marketing your business while others won’t. If the franchisor says verbally that they will assist with the marketing costs this needs to be very clearly defined and quantified and included in the legal papers. Marketing any business today is very expensive but without it, the business will either fail or grow very, very slowly. It is in both your interests to establish and grow the franchised business package as soon as possible.
Many franchises include a developed marketing plan based on their previous experience and knowledge. After all, this is essential information and there is absolutely no point in reinventing the wheel. This alone may be the strongest selling point of the franchisors business package so any franchisor trying to sell their business opportunity would include a comprehensive marketing package.
The business idea of buying a franchise is a good one providing that you do a thorough due diligence by speaking with other franchisees and have everything in writing.