Does the franchise have a defined geographical area?
A franchisor can ask you to define your own area as a basis for starting negotiations but the ‘deal’ will very much depend on demographics e.g. rural franchises may have larger areas to work within as populations are smaller than for city businesses. Can I visit other franchisees? If you’re investing in a new franchise then you must see other franchisees in action. Ask them the same questions that you’ve asked the franchisor, any discrepancy will give you your next firm line of enquiry. The franchisor is likely to showcase a successful business, so enquire about the franchisee turnover, average growth rates, ongoing training, reporting systems and quality assurance measures. If you’re buying an existing franchise, full accounts and operational details should be available. There will, however, be ‘good will’ factored into any figures. Investigate this thoroughly to ensure that you stand a good chance of sustaining business at its current level in the initial stages. For potential and ne
