What should a Franchise Look for before Investing?
For a number of Indians, franchising is a preferred route to try their hand at entrepreneurship. A report for Franchising Association of India, Franchising In India: Metrics and Measures, showed that franchising is growing at a faster rate than the overall retail industry. And the beauty industry is one of the top sectors for franchising.
So it’s very important that you as a franchisee, know every detail of the company whose you are planning to buy a franchise. Here we list you few steps that you should keep in mind before investing in a franchise.
- Before buying a franchise, it is important that you research as much about the franchise opportunity as possible. Search online, spend time researching the company, talk to existing franchise owners, go on a site visit etc.
- Contact the franchisor to express interest in becoming a franchisee. Carefully review all materials provided by the franchisor.
- Ask about training and support materials.
- Understand the comprehensive financial investment that is required, which will include the initial franchisee fee, equipment or location costs, ongoing monthly fees etc.
- Find out what level of support headquarters offers once the franchise is open.
- The Franchise Disclosure Document (FDD) and the Franchise Agreement are the two most important documents prospective franchise owners will receive once they’ve progressed towards becoming franchisees. Take time to review all documents provided in great detail.