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9 questions to ask before purchasing a franchise Franchising Articles Visit Website Send Email Close Nine questions you simply have to ask before you purchase a franchise; questions for the franchisor under scrutiny and questions to ask yourself and which demand an honest answer. Careful consideration of the issues to hand will set you in good stead whichever franchise you decide to buy. When an enthusiastic buyer signs' on the dotted line and looks forward to opening up his or her franchise there will have been a host of questions thrown around in discussions about the business. Some franchisors are tough on their potential franchisees and put them through their paces before accepting them into the fold, others are less stringent…show more content…
The cost of such an upgrade can be tens or hundreds of thousands of dollars, depending on the type of franchise. Mark-ups and rebates: where franchisees are required to buy goods or services from the franchisor, the franchisor may apply a mark-up to the price. This may be unavoidable if the franchisor is the only possible supplier of the item. If there is a range of potential suppliers and exact quality is the same, franchisor mark-ups may generally be lower than those of other suppliers. Rebates are payments made by suppliers to franchisors based on a percentage of franchisee purchases from those suppliers. This may be viewed as a form of franchisee payment to the franchisor, even though it is paid via a third party, the supplier. Many franchisors receive rebates from suppliers. The list of suppliers who pay rebates are required to be disclosed to a potential and renewing franchisee in the franchisor's Disclosure Document. 3. What ongoing support will you give me? Many potential franchisees are a little disappointed when they read through their Disclosure Document and franchise agreement (if in fact they bother to do so), writes Garry Williamson from The Franchise Centre . In our experience the franchisor can be very vague about the amount of ongoing support the franchisee will actually receive. Of course the franchisor is all smiles and happy to give
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