| |
| |
|
Small Business Information |
|
|
|
What To Consider Before Buying A Franchise
Here are some useful tips on what to consider before buying a franchise. Before investing in any franchise system, be sure to get a copy of the franchisor's disclosure document. Sometimes this document is called a Franchise Offering Circular. You should read the entire disclosure document. The following outline will help you to understand key provisions of typical disclosure documents. Get a clarification or answer to your concerns before you invest. Business Background: The disclosure document identifies the executives of the franchise system and describes their prior experience. Consider not only their general business background, but their experience in managing a franchise system. Also consider how long they have been with the company. Investing with an inexperienced franchisor may be riskier than investing with an experienced one. Litigation History: The disclosure document helps you assess the background of the franchisor and its executives by requiring the disclosure of prior litigation. The disclosure document tells you if the franchisor, or any of its executive officers, has been convicted of crimes involving, for example, fraud. Bankruptcy: The disclosure document tells you if the franchisor or any of its executives have recently been involved in a bankruptcy. This will help you to assess the franchisor's financial stability. Costs: The disclosure document tells you the costs involved to start one of the company's franchises. It will describe any initial deposit or franchise fee, which may be non-refundable, and costs for initial inventory, signs, equipment, leases, or rentals. Restrictions: Your franchisor may restrict how you operate your outlet. The disclosure document tells you if the franchisor limits the supplier of goods from whom you may purchase, the goods or services you may offer for sale, the customers to whom you can offer goods or services or the territory in which you can sell goods or services. Terminations: The disclosure document tells you the conditions under which the franchisor may terminate your franchise and your obligations to the franchisor after termination. It also tells you the conditions under which you can renew, sell, or assign your franchise to other parties. Training: The disclosure document will explain the franchisor's training and assistance program. Make sure you understand the level of training offered. Advertising: You often must contribute a percentage of your income to an advertising fund even if you disagree with how these funds are used. The disclosure document provides information on advertising costs. Current and Former Franchisees: The disclosure document provides important information about current and former franchisees. Determine how many franchises are currently operating. A large number of franchisees in your area may mean increased competition. Pay attention to the number of terminated franchisees. A large number of terminated, cancelled, or non-renewed franchises may indicate problems. Earnings Potential: You may want to know how much money you can make if you invest in a particular franchise system. Be careful as earnings projections can be misleading. Insist upon written substantiation for any earnings projections or suggestions about your potential income or sales. Financial History: The disclosure document provides you with important information about the company's financial status, including audited financial statements. Be aware that investing in a financially unstable franchisor is a significant risk; the company may go out of business or into bankruptcy after you have invested your money. Hire a lawyer or an accountant to review the franchisor's financial statements. Do not attempt to extract this important information from the disclosure document unless you have considerable background in these matters. Your lawyer or accountant can help you understand the information. You may freely reprint this article provided the author's biography remains intact: John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.
MORE RESOURCES:
Small-Business - Google News |
|
|
|
RELATED ARTICLES
Marketing Your Small Business - The Top 10 Brilliant Ideas A Brilliant Marketing Idea.. 11 Things Small Business Owners Can Learn From Rudy Giuliani 1. Leadership Is Learned - While many people appear to have an innate ability to lead, most learn from their life and business experiences, then put these lessons into practice. Canon City, Colorado - Good for Small Business Canon City, Colorado is known for it's 6 Prisons; State and Federal, women's prison and juvenile. It is also home to the First Colorado Territorial Prison. Electronic Franchise Disclosure and E-Signature Future for Investors It has been discussed allowing Franchising companies to electronically disclose franchise documents to the public and prospective franchisees. If the Federal Trade Commission wants to make UFOC information available electronically through email to catch up with the newest technologies then it will get complaints and make up another rule saying no unsolicited UFOC maybe sent through email. Franchising in The Middle East There Will Bring Significant Opportunity for US Based Franchisors As stability emerges in the Middle East there will be significant opportunity for the Franchising Community. Arab Franchising appears to be of interest for those seeking economic growth in much of that region of the World. 7 Essentinal Resources for Small Business So you want to start a business but you don't have a lot of money? Start your business online, and it won't be a problem.There are some pretty terrific resources you can use. 432 Page Franchise Report by the FTC The Federal Trade Commission is upgrading the franchise law and they have made a report. Recently I have been reviewing the FTC's franchise rule report page by page. Smart PR Tactics for Small Businesses Small businesses need Public Relations, possibly more than large corporations, to put them on the map. If you consider that time is money, however, you may find that handling your own public relations is a daunting task and not necessarily worth the monetary savings. How to be Annoyed and Make Money When do annoyances in a relationship become too much to bear?Have you ever worked for a client that drives you up the wall and back down the other side but you keep working with them because you need the money? I am sure most of us have been in that position and were so happy when that relationship finally broke up. It felt like you were finally free and able to do what you do best somewhere else, or you fell into panic because you had no income anymore. Your Babys Ugly..and Youve Got Bad Breath I've got good news and bad news. The good news is that 98% of businesses are small businesses. Youll See It When You Believe It - Growing Your Business from the Inside Out What unspoken message are you sending your clients and customers? Is your personal energy field projecting positive, high vibrational energy or just the opposite? The latter will cost you business--and worse, you won't even realize it. The energy I'm talking about here has been called many things, "being in flow," "in the zone," "locked on", "jazzed", "sending out good vibes," (that last one is for anyone old enough to remember the 60's). Franchise Buyers Lying On Forms The Federal Trade Commission which governs the franchise industry thru the franchise rule, which enforces Franchise Disclosure laws seems to think that consumers need to be protected even when they lie. Often The FTC takes complaints from consumers who claim they had been ripped off or lied to from someone selling a Biz-OP or some corporation, which sells franchises. You Dont Yet Know What You Dont Know Someone new to business ownership recently told me, "Before I opened my business, I thought I was pretty well prepared. I knew how to produce and deliver our product. Get Approved for a Franchise Deciding to start your own franchise is just one of the first steps to getting started. Buying a franchise is a lot like dating. Entrepreneur to Employer You make the decision to go into business and for some time work from home or in leased premises and your business starts to grow.Like all businesses you experience growing pains. Mission Statements: More Important Than You Thought If an organization lacks a mission statement, it is worthwhile to at least try to draft one. Even if it does not yield an acceptable final draft, the exercise will be rewarding for the hard work which must go into figuring out the company's direction and putative purpose. The Perilous Franchise Agreement: What Did You Sign? Purchasing a franchise has become one of the most popular avenues for individuals looking to escape the rigid work day of a 9 to 5 job and take the leap into the world of independent business owner. After all, who doesn't dream of being their own boss and controlling the limits of their own financial future? For anyone looking to act on their entrepreneurial spirit, franchising can indeed offer many attractive qualities that can provide excellent growth and earning potential, as well as satisfy that longing for independence. Business Relationships Defined What makes a business relationship?What really makes a business relationship? This may be very hard to define as it goes beyond just meeting the person and chatting about something you have in common. A relationship is developed over a period of time and usually does not happen instantly. Janitorial Cleaning Service: Getting Started A janitorial cleaning service is one of the best businesses for a hardworking, blue collar person to start from scratch. Every business and every building needs to be cleaned once in a while - in some cases, many times each day. Bogus Investor and Consumer Complaints and Consumer Misrepresentation Like most regulatory bodies in the United States, the Federal Trade Commission gets investor and consumer complaints. But how much of these are actually real? These agencies then act on such complaints and increase regulations.
|
| home | site map |
| © 2006 |
