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The How’s to Shower Before Taking a Franchise

To get the first sip in the entrepreneurship world many decide to get started with an established franchise business as taking the franchise opportunity offers an acknowledged brand name, training, ongoing support and more assistance from franchisor. However, becoming a franchisee needs some homework to complete. First, read the steps of franchising thoroughly and then get ready with questions to ask from the franchisor before starting your new business.

Look at the list of questions a franchisee should shower on franchisor prior to owning a franchise:

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How about the Costs?

Cost is the very important question to put up while taking a franchise which includes the buying price of franchise, the needed investment, the fees included and other expenses. The required cost and investment range varies from franchisor to franchisor. Also, till the business reaches a break-even point a franchisee should have operating capital to cover losses. Costs also cover the other bills such as rent, royalty fees and utilities.

How much control you will have?

A franchisee should know how much control do you have. The franchisor may have some rules and regulations in regard to location, design, the targeted area, appearance standards, the methods of operation, There can be restrictions on employees hiring, marketing campaigns, operating hours, discount offerings and the types of goods and services available for selling.

How franchisor will support you ?

Franchisors generally provides assistance to franchisee: training support, finance, marketing , ongoing support. Ask every detail from franchisor about the franchising so as to avoid unwanted surprises down the road. Every term and condition should be clearly mentioned in franchise agreement including the breach and termination of contract.

How long it will take you to make money?

The franchise plan provided by the franchisor should include the outlook of a break-even point to get an idea of the time period you will start generating money. You can contact other franchisees of the same business and ask how long it took them to gain profits.

How to end a franchise ?

A franchise agreement should clearly mention every term and condition. Where the franchisor may end the agreement if the franchisee fails in paying royalties fees, breaking performance standards, going against sales restrictions. In some cases, there are chances to lose initial investment amount if the termination of franchise contract takes place.

So now when you are well-known with your new franchised business, it’s time to get started.

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Posted in: Business Tips, Franchise

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