10 Things I Know About…Buying a Franchise
Mark Dubinsky, President of Dunkin Donuts Independent Franchise Owners, (DDIFO), which represents more than 1,700 member franchisee owners in 12 states. He was also CEO of his family’s 27-unit franchised network of Dunkin’ Donuts shops. NEFA member, Dubinsky wrote in the Worcester Business Journal.
10. Do Your Homework
Work for an existing franchisee for at least three months to see if you are passionate about the business.
9. Philosophy Matters
Make sure you are comfortable with the franchisor’s management team, culture, strategies and tactics.
8. Fine Print
Read and understand every word of the franchise agreement and any other documents you will be required to execute.
7. Gather A Team Of Experts
Hire competent, experienced professionals to advise you.
6. Key Disclosures
Read and understand the Franchise Disclosure Document (FDD). For more information, check out this web site: http://www.ftc.gov/bcp/franchise/faq1.shtm.
5. Get References
Speak to at least 10 existing and 5 ex-franchisees about the pros and cons of being a franchisee.
4. Legal Reference
Understand the details and the quantity of any litigation between the franchisor and its franchisees.
3. Business Reference
Speak to the independent franchisee organization(s) (if any) and try to get any remaining questions answered.
2. Money In The Bank
Make sure you have sufficient capital to meet all of your current and future obligations.
1. Listen To Your Heart
Prospective franchisees must understand the business reasons why they should become a franchisee.
Jim Coen, Mr. Franchise
I have learned franchising from the ground up. I’ve been a franchisee for a bad franchisor. I’ve worked for good franchisors and I’ve worked for marginal franchisors. I’ve helped many franchisees succeed.
I provide a consulting process that saves you time and money in your franchise search and provides you with the tools to make the right choice for you and your family.
Call: 617-469-3002
Comments
No matter who you are, no matter how “inexpensive” a franchise investment might be, make sure you read and heed the “10 things I know about…buying a franchise” These 10 steps are minimum, I would only add that many franchisees are reluctant to tell the truth and many ex-franchisees might be hard to get a hold of. Additionally, I would always ask about the chain of ownership of any franchise. For instance, if the Portland area was available and you wanted it, you need to make sure, in writing, if it ever had a failed or closed up franchise in Portland before, or anywhere close to Portland. Franchisors are not to be trusted, sometimes the employee turn-over rate is so extreme that the last thing anyone knows at the home office is the 10 year history of a particular geographic area. If you have questions concerning re-franchised, failed or closed Pirtek locations you can call me, Scott Layer @ 813-318-1258. Thank you Jim for another great article.
Write a Comment