Determine Profitability

Tools For Digging Up The Info

Outside of the UFOC, three other tools may also be available to you:

1. If the franchise is a public company, the Securities and Exchange Commission (SEC) requires it to distribute reports to its shareholders. These reports contain information not provided in the franchisor's UFOC. They're available from your broker and can also usually be found on the company's Web site.

2. Conduct an online search of the franchisor's press releases and other news reports on the company (especially within industry trade journals). Profitability information is often provided. You'll likely learn a lot about the franchisor's industry segment and may even discover information about competitors that might better fit your needs.

3. Robert Bond has published a collection of earnings claims by franchisors in his book, How Much Can I Make?(Source Book Publications, $23.96). It may have financial information on your franchisor and/or its competitors.

Getting the information you need to determine the financial potential of your franchise investment may not be as easy or as straightforward as it would be if it were contained in the franchisor's UFOC. But with a little work, a clear understanding of the dynamics of a franchise system, a grasp of the UFOC and possibly the assistance of a knowledgeable professional, you can build a fairly accurate profitability picture to help with your franchise decision.

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