Disclosure Document – DD
The DD lists the experience of the directors, any litigation past and present, franchisee contact details and trademark registrations. Study this carefully and satisfy yourself of the integrity of the system.
Operations Manual – OM
Lists minimum performance criteria and other legal obligations on the franchisee. It is important you read this as a breach of the OM is a breach of the franchise agreement.
If purchasing an existing franchise that has a leased property, check that there is enough time remaining on the lease to make a return on investment. Check also that there are no plans by the landlord to demolish the building. The DD should list this but check with the landlord as well.
Fit Out Costs
Are fit out costs fixed or variable in cost and when are they next due.
Your interview should be a two way question and answer session, not all one way. Ask plenty of questions surrounding support, business plans etc
Franchising Code of Conduct – FCOC
The FCOC is in place to protect all parties in the partnership. Ensure you get legal and financial advice. It may cost a few thousand dollars, but in the scheme of the investment, it’s well worth while.