Franchise for Sale? Yes Please

If you’re buying an existing franchise then the seller will most likely not be completely honest as to whether or not they would sign the franchise agreement again – because ultimately they want the sale.

However, the disclosure document from the franchisor will disclose other franchisees in your local area, state and even nationwide. Why not give another, or a few, franchisees a call to see if they would recommend entering into the franchise agreement. Asking them whether they are making any money and if the franchisor is decent to deal with are two questions which should be on the top of your list.

We often refer to the way out as the “yellow brick road”.

Does the franchise agreement give you a way out and if so in what circumstances?

Franchise agreements often have varying amounts to be paid by the franchisee to the franchisor during the term of the franchise agreement and are not limited to a one off payment at the commencement of the franchise.

A franchisee’s financial obligations, like any business, are onerous and without proper understanding and knowledge of the financial obligations may become all too overwhelming.

Ask yourself, after taking into account all the amounts to be paid as a franchisee – can I still make money?

If you need to rent a premise to operate your franchise business make sure the term of the tenancy and the term of the franchise agreement are the same.

If either your landlord or franchisor won’t accommodate the same term what will you do if with the premise if the franchise agreement ends (and the term isn’t extended) or where will you operate the franchise business from if the lease expires – the costs of setting up somewhere else will not be inexpensive.