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What should I look for when purchasing a franchise?

On Behalf of | May 18, 2023 | Franchising |

Whether they are a first-time business owner or an experienced franchisee, what an investor in the Tampa area should look for in a franchise depends a lot on the investor’s circumstances.

  • The investor will need to be aware of their own management strengths and weaknesses. For example, if they do not have restaurant experience, they may want to stay away from a fast food franchise or make sure they buy in to one that offers a lot of training and support.
  • As with any business, they will want to have a full understanding of their market conditions and how those conditions might change in the future.
  • They will need to count the financial costs of starting up or taking over a franchise.
  • Every franchise offers slightly different terms and conditions. Would-be franchisees will need to understand their legal rights and responsibilities and how those might impact their ability to run a successful business. Aside from the contract with a franchisor, there may be other legal considerations as well.
  • As a business matter, a franchisee will need to prioritize what is most important to them. For example, when recommending franchises, Entrepreneur, an online resource, prioritizes brand recognition and management support over start-up costs when making recommendations. An individual Florida investor may instead prefer lower start-up costs but be willing to take a risk on a less recognized product.

There are many legal considerations involved in buying in to a franchise

Someone buying in to a franchise will want to be sure they review and understand their agreement. Many times, franchisees will be able to negotiate some of the terms.

On other occasions, it may be a matter of walking away from a deal or coming up with concrete plans for meeting their obligations.

From the other perspective, franchisors also need to make sure they understand their obligations, have carefully considered who invests in their brand, and have prepared a detailed and clear agreement.

To some extent, they also need to understand an investor’s ultimate goals and expectations.