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Franchises
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Article 9: Tips for Evaluating a Franchise
Not any old franchise will do.
Comparison shop. Take your time. Purchasing even
a low-investment franchise is still a big
decision.
Set your financial investment limit and stick to
it. This is no time to extend yourself beyond
your financial reach.
Make sure the franchise is a match with your
skills. Find one where you can put your past
experience and knowledge to work. Having said
that, you also need scrutinize a franchise’s
training and ongoing support. There’s much to be
learned about each franchise’s procedures.
Look for quality in reputation, products and
services. The more the franchise is recognized
and respected by potential customers, the better
chance you’ll have at success. Also look for a
franchise whose products and services are in
demand and priced right for the market. Evaluate
the growth prospects for the franchise. Find out
if the franchisor’s support services and
supplies can accommodate fast growth.
Make every attempt to meet the franchisor’s top
people—from the trainer who will be assigned to
you to the suppliers.
Look into lawsuits. If the franchisor has
suffered substantial judgments, it can signal
past impropriety and perhaps current financial
weakness.
Hire a lawyer and an accountant to review the
franchisor’s financial statements. The
investment in advice now could save you loads of
money down the road.
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