Archive for the ‘Franchise Legals’ Category

Due diligence is the keyword to ensure that everything you have planned in buying a franchise will not go in vain. Proper franchise opportunity analysis can only do you good.

Franchise due diligence

Due diligence is resource-intensive. Doing it requires you to put on your business analyst hat, as well as your skepticism hat.

Unfortunately, choosing NOT to do the business due diligence will bring you problems and perils later on.

A price to pay for not doing business due diligence: I lost my franchise units

You don’t need to prove anything, as I have already proved that not doing my due diligence properly before buying businesses cost me not only…

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Analysing new franchise opportunities

New franchises – especially those offering new and in-trend concepts – are always interesting and will likely to attract fans and enthusiasts into franchisees.

New franchises play an important role in franchising: New franchises breathe fresh air to the franchising world, adding value to the wealth of opportunities in franchising worldwide.

Full of potential, new franchises will likely to attract adventurous franchisee candidates to invest in a franchise unit and join the band wagon of ‘the next big thing’ – Some of the new franchises do become the next big thing, indeed.

However, anything that bears the word ‘new’ in the description will always present…

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Franchise agreement signing

I have just read an article from The New York Times that covers the questions you should ask to yourself and a franchisor before deciding on buying the franchise of your dream.

The article opens up some facts that, to tell you the truth, somewhat against franchising, in a sense that you should take great(er) care to invest your money in a franchise opportunities, as many facts and pitches made by the franchise companies are misleading to the ‘untrained eyes.’

I enjoy reading and benefit greatly from the article and would like to share the 9 questions to ask with you.

9 questions you should answer before…

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Franchise partnership break-up

We are always ‘reminded’ by various publications on franchising, online and off line, that franchising is expensive, and bailing out from the franchise agreement is costly for the franchisee.

Unfortunately, not many realise that not only franchisees, franchisors are also financially affected by the franchisee-franchisor partnership break-up – And that is just the tip of the iceberg.

Break-up costs to the franchisee

It is obvious that the franchisee will be severely hit by huge monetary loss due to ‘the-usuals’ in the franchise agreement – The non-competing agreement and the right for the franchisor to terminate the franchise agreement almost at will.

The non-competing agreement – Usually, the…

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Franchise ownership

I stumbled on an article on Yahoo! Small Business, that (again) put franchise ownership as one of 7 most overrated businesses.

Kelly K. Spors and Kevin Salwen, the article writers, have conversed with small business experts to identify the overrated businesses. Other than franchise ownership, the other six are: Restaurants, direct sales, online retail, high-end retail, independent consulting and traffic-driven websites.

The culprit that put franchise ownership on the list is, again, the franchise agreement. “…too many people don’t understand the risks associated with franchising and sign restrictive franchise agreements without thoroughly researching their franchisor and their contractual obligations.”

With all due respect – While small business…

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Disagreeing business partners

You can’t simply please everybody. This fact also applies in franchising.

If you are a franchisor, you can’t simply keep all of your franchisees happy, no matter how well you set the SOP (a.k.a. the “game plan”) and how hard you try to please your franchisees.

The cold hard truth is, “bad” franchisees will nag, whine, and even stab at your back no matter how perfect your franchise is – They simply can’t be pleased.

The truth is even worse if you are a franchisee. Your fellow franchisee that has a bad attitude toward the franchise can also impact your franchise unit.

Why “bad” franchisee is bad…

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Success in franchising

There are always pros and cons in franchising. The pros always believe that strong brand name and proven systems are the main benefits of franchising. The cons always believe that franchising is expensive and unfair (benefit franchisors more than their franchisees.)

I am always pro-franchising. However, I can not deny that there are some legitimate reasons why you should not buy a franchise, if you do not have the proper mindset and knowledge for franchising.

10 reasons not to buy a franchise

According to Nolo.com, there are 10 good reasons not to buy a franchise:

1. Questionable profitability
   Most franchise owners don’t show potential franchisee the whole picture – They…

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Exit strategy

You are ready with the resources on your side. You revved-up and ready to invest your money in a good franchise. Your next step is to find which franchise to partner with and to invest in, and after that you are ready to start making money.

We are ready to go, right? Well, not quite.

Let us go back a step or two in your plan. There is one more thing you need to heed before buying a franchise unit. Unlike other type of businesses, franchising, in my own experience, requires more commitment on your side. That being said, you need to seriously think about your…

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