Whether you are a newbie seeking to start a franchise, a multiunit franchise owner, an investment group seeking to diversify, an investor considering buying stock in a publically traded franchise company, the key to analyzing whether a franchise system is investment worthy is to dissect the franchise business model.
As with starting any business, a franchise brings both risks and potential rewards. Franchisees are responsible for the initial investment and the effort to establish the unit and also run the day to day operations. The franchisor gains benefit from an expansion of the brand and recurring revenues from the franchised unit. Each and every franchise system is unique and has different ways the parties involved benefit from the enterprise.
The Federal Trade Commission (FTC) requires franchise companies to disclose information in the Franchise Disclosure Document (FDD) on 23 Items the FTC has deemed critical for any franchise investor to understand about the opportunity before the investment. The FDD is a schematic to the inner workings of the franchise relationship. The FDD provides insight into franchise value, trends, and the probability of success.
The FDD includes information regarding the history, costs, restrictions, franchisee obligations, financing, territory, intellectual property, renewal, termination, transfers, dispute resolution, financial performance, outlets and franchise ownership trends of the enterprise.
At Franchise Perfection we help interested parties evaluate franchise opportunities.
We provide due diligence service to evaluate the franchise opportunity you are considering by taking an in-depth Franchise Business Model Review of the Franchise Disclosure Document. The cost of this service is $500.00. You will receive a detailed executive summary detailing the good, bad and the underbelly associated with the franchise opportunity. We are not attorneys and don’t profess to offer legal advice; our experience is in franchising and business. The Franchise Perfection Franchise FDD Review digs into the franchise business model and helps you determine the value of the opportunity. We do not review the franchise agreement directly other than the terms and conditions disclosed in the Franchise Disclosure Document.
For more information contact Jim Coen at email@example.com or call 617-469-3002.