Franchise contracts are a great way of achieving success, but you should consider carefully, before signing the contract of becoming a franchise owner. Here are the 10 things about franchise contracts you should know, before turning franchisee.
1. Required Intellectual Stimulation
Most of the franchises consist of fundamental service and retail businesses, which does not require much sophistication or high qualification. People who can handle finances, as well as offer customer service are preferred.
2. Other Priorities
Franchise agreements specify that, you devote all your working hours to franchise operations. You may not have the time to pursue any of your other interests.
3. Dealing with Public
As a franchisee, you need to deal with public and sometimes it can get rude, neurotic and downright vicious. You should think how you can handle it all, without taking it personally.
4. Other Corporate Opportunities
If you are a young, dynamic and talented person in your field, then you have chances of getting a corporate job, when there is improvement in economy.
5. Territory Restriction
As a franchise owner, you are not allowed to move out of your territory or start units in other location or advertise outside your territory. You should ensure that you know the place well.
6. Franchise Costs
An ideal franchise will present all the costs of starting and running your franchise, for a year or two. You should see that franchise’s UFOC clearly specifies all costs and look out for any hidden costs, which will not be stated in UFOC.
7. Business Model
Nowadays, companies start franchising, even with the presence of just two to three outlets in the same area. You should keep in mind that, if a franchise concept works well in some part, it does not mean that, it will do well in other location also.
8. Franchise Management
Ask for detailed information about key managers, to know about their experience and their way of handling difficult situations in business.
9. Right Location
It is better if you visit different types of franchise outlets, specially the hugely successful ones before owning a franchise, to assess about their location. It helps you decide about your ideal location.
10. Future Plans
You should find out the future plans of franchise, such as whether they plan to start company-owned outlets instead of franchise outlets; ensure that they can’t start company-owned stores within your territory.