Buying a franchise?

Buying a franchise is just the same as buying into any business.  The purchase needs to be made in the cold light of day and not on impulse.

Balance sheets need to be looked at and bottom lines investigated.   The franchise should also be compared with similar franchises in similar areas to establish realistic expectations and incomes.

What Intellectual Property is owned by the franchisor – or (in some cases) not owned by him.

The franchise name is an essential factor:
- this is how franchises products and services are brought, sold and marketed.
- It is how its customers know the business.  

Particularly when entering into a new franchise system, or into a new area it is imperative that the monopoly position encompassed in the name of the franchise is investigated thoroughly.

The brand and the exclusivity that it brings to a business will form a large part of the purchase price of the franchise and is one of the most attractive forces to potential customers. A name-brand availability search is therefore essential and should be performed by a professional search service.

Other aspects of Intellectual Property such as patent ownership, copyright and marketing wishes should also be investigated and their ownership (right to use) determined.

Just about all franchisees have a genuine passion for their products and the business that they are in – so it is important that when choosing a franchise that it is not chosen because you like the product but with an eye to the bottom line today and in the future.   Conversely, a franchise shall not be chosen simply because the bottom line looks good. 

Bottom lines and profit can easily evaporate if there is no passion for the product, the business or a commitment to the customer.