So you think you've found the right franchise for you? Ask these 24 questions. If the answers aren't satisfactory, chances are there's not much opportunity there.
The Franchise Organization
- Does the franchisor have a good track record?
- Do the principals of the franchise have industry expertise?
- How strong is the franchisor's financial condition?
- How thoroughly does the franchisor screen franchisees?
- How profitable is the franchisor and its franchisees?
The Product Or Service
- Is there demand for the product or service?
- Are industry sales strong?
- How does it compare to competing products or services?
- Is the product or service competitively priced?
- What is the potential for industry growth?
The Market Area
- Are exclusive territories offered?
- Does the territory you're considering have sales potential?
- Is the competition strong in this area?
- How successful are franchises near this area?
- Are the fees and royalties reasonable?
- How attractive are the renewal, termination and transfer conditions?
- If the franchisor requires you to purchase proprietary inventory, how useful is it?
- If the franchisor requires you to meet annual sales quotas, are they reasonable?
- Does the franchisor help with site selection, lease negotiations and store layout?
- Does the franchisor provide ongoing training?
- Does the franchisor provide financing?
- Does the franchisor sponsor an advertising fund to which franchisees contribute?
- How strong are the franchisor's promotional programs?
- Does the franchisor have favorable national contracts for goods and services?
Reprinted from Start Your Own Business: The Only Start-Up Book You'll Ever Need, by Rieva Lesonsky and the staff of Entrepreneur magazine (Entrepreneur Media Inc.). To order a copy, visit your bookstore or www.entrepreneurmag.com.