Hire your Franchise
If you have already decided to contract a franchise, prepare to take the following steps:
First Step – Preliminary Information
The Franchisor will send you a company information package accompanied by a form that you must fill out providing your personal data, financial information and work experience. If the applicant completes the form and the Franchisor approves the application, it will proceed to the Second step.
Second Step- Business Information (“Disclosure Document”)
The Business Information (“Disclosure Document”) is a document that must be submitted by the Franchisee to the potential Franchisor at least 10 days before the signing of the Franchise Agreement, in accordance with the rules of the Federal Trade Commission . The Document must contain information on the following matters:
- History of the Franchise and trajectory of the executives and directors.
- Detailed description of the business to be franchised.
- Text of the Franchise Agreement specifying in detail the costs and fees that the Franchisor must pay and the obligations of the Parties during the term of the Agreement and after.
- Past and current litigation history of the company and its officers and directors;
- Detail of any bankruptcy, transfer of shares, termination of contracts or any other relevant information related to the evolution of the units that make up the Franchise system.
- Audited Financial Statements of the Franchisor for the last three years.
- List of franchised units in operation
The Document should be carefully reviewed to learn about the business philosophy of those who lead the franchise system and learn about the managerial aspects on which its success has been based. With this knowledge you can proceed to Step Three.
Third Step- Contact other Franchisees
The best source of information for prospective Franchisors is that derived from existing Franchisors. Feel free to contact several of them during the pre-evaluation period and inquire about training programs, start-up and operational support, advertising and marketing programs, and the nature of the Franchisor's relationships with the Franchisee. Also know how much the Franchisee really invested and if he is satisfied with the benefits that he is obtaining from the operation.
Fourth Step- Review the Documentation of the Franchise System
In addition to the "Disclosure Document", the company must offer its Franchisees detailed manuals of operation, computer control systems and marketing. These manuals will be delivered to the Franchisee once the Franchise Contract has been signed.
Step Five- Meet the Franchisor
Once you have evaluated the documentation you will want to meet the key people of the Franchising company. This first meeting is generally held at the offices of the Headquarters, so you must be prepared to travel; although, in some cases, the Franchisor designates “master” Franchisors to cover regional markets. Make sure you know the people who will be in charge of the training and routine operations with the Franchisees. Ask all the questions that come to mind and evaluate the capacity of the people who will be in charge of solving your operational problems.
Step Six – Make the Decision
If at this point you are enthusiastic about acquiring the Franchise, decide to take the big step. Agree with the Franchisor on a date for signing the Franchise Agreement and reserve financial resources to honor his obligations to the Franchisor.
If, on the other hand, you have doubts or feel that this is not the opportunity you wanted, withdraw from the negotiations and continue evaluating other possibilities. Remember that the most important thing for us is to have satisfied clients who spread the benefits of our advice among their associates. If you want more information on the subject, do not hesitate to contact us.
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