24 Things to Watch For
- Initial Franchise Fee
- Build Out Costs
- The Royalty Fee
- The Marketing Fee
- Duration
- Renewal Fees
- FDD Changes
- Jurisdiction for Disputes
- Who holds the lease
- Local Marketing Terms
- Business Experience of the Franchisors
- Prior closures
- Compliance Programs
- Mandatory Products from Franchisor
- Franchisor Financing vs Market Rates
- Franchisor’s Duties
- Protected Territory
- Intellectual Property Rights
- Operations Manual
- Management Restrictions
- Product Restrictions
- Earnings Claims (Average Unit Volume)
- Current Financial Statements
- The 14-day Rule
Source: “Buying a Franchise: 24 Items to Beware of Before Signing!!!” by Frank Caperino.