If you've ever wondered how to start a franchise, where to find franchisees, how the franchisor/ franchisee relationship should work, or what to ask before purchasing a franchise, you've come to the right place. Below, we answer the most common questions prospective franchisees and franchisors have asked us over the years.
Once you've finished your research, you may be interested in:
What is a Franchise?
A franchise (or franchising) is a method of distributing products or services involving a franchisor, who establishes the brand’s trademark or trade name and a business system, and a franchisee, who pays a royalty and often an initial fee for the right to do business under the franchisor's name and system.
How Much Money Do I Need to Buy a Franchise?
Investment requirements for purchasing a franchise differ tremendously based on the industry and the type of business the franchise operates.
Is a franchise a good way to start your own business?
There are typically three paths to going into business for yourself: starting a new business, buying a new franchise, or purchasing an existing franchise. Each option carries pros and cons, which we have outlined below.
What are the Advantages and Disadvantages of Owning a Franchise?
What Should I Consider Before Buying a Franchise?
Among the points IFA recommends for investigation are:
Am I Ready to Buy a Franchise? Three Questions to Ask Yourself
There are three main questions you should ask yourself:
Am I Ready to Start My Own Business?
“Find something you love to do and you’ll never have to work a day in your life.” -Harvey Mackay
How Do I Franchise My Business?
Franchising your business can not only strengthen your company's brand recognition and reach, but it can also help secure its future. Franchising provides franchise business owners with an established product or service, which may already enjoy widespread brand-name recognition.
How Do I Fund My Franchise?
The sooner the better. It is usually a good idea to start figuring out how you will be funding your business venture as early in the process as you can. Some funding options take time and you don’t want to miss out on an opportunity. One of the most important aspects of opening a franchise is funding.
Is Franchising Right for You?
10 Key Questions to Ask....
What Are Alternative Business Models to Franchising?
In addition to franchising, there are two other popular methods by which businesses expand their market and distribution channels:
What Are Common Franchising Terms and Definitions?
• Business format franchise: This type of franchise includes not only a product, service and trademark, but also the complete method to conduct the business itself, such as the marketing plan and operations manuals.
What Criteria Should I Use When Evaluating a Franchise Opportunity?
Before purchasing a franchise, we recommend carefully considering the items in the eight categories below that will be critical to your success:
What Information Does a Franchise Disclosure Document (FDD) Contain?
The purpose of the Franchise Disclosure Document (FDD) is to provide prospective franchisees with information about the franchisor, the franchise system and the agreements they will need to sign so that they can make an informed decision.
What Questions Should I Ask Franchisees When Evaluating a Franchise?
Questions about the franchisor:
What Questions Should I Ask Franchisors When Evaluating a Franchise?
Overall Questions to ask the Franchisor:
What Questions Should You Ask Before Purchasing a Franchise?
Before purchasing a franchise, make sure to ask the questions below to evaluate the potential franchise opportunity.
Evaluate the Strength of the Franchisor
What Should Franchisees Know about a Franchisor's Financials?
Financial statements represent the financial track record of your franchise and tell you how well positioned your franchisor will be for the future.
Where Can I Find the Best Franchise Opportunities?
The International Franchise Association has the largest directory of available franchise opportunities online.
What Are the Most Important Items in the Franchise Disclosure Document (FDD)?
The International Franchise Association considers the six sections of the Franchise Disclosure Document to be critical pieces of information to help you evaluate a potential franchise for purchase:
Item 7: Costs
How Do I Make My Franchise Successful?
Making any business reach its full potential takes talent and hard work. If you've selected your franchise well, your franchisor will be able to help you avoid many of the mistakes new, independent start-up businesses make. Below, we've listed 10 keys for franchise success.
What Are the Risks of Buying a Franchise?
Like starting any business, buying a franchise involves risk. Although most franchisees are satisfied and successful, some do suffer financial losses. That’s why you must be particularly wary of any company that “guarantees” profit or certain success.
What is the FTC Franchise Rule?
The FTC Franchise Rule is a federal regulation which requires franchisors to prepare an extensive disclosure document and give a copy of this document to any prospective franchise purchaser.
What are the Most Important Sections in the Franchise Agreement?
Franchise agreements vary between different franchises, but these seven areas should be addressed in every franchise agreement.
What Legal Information Should I Review When Considering a Franchise?
A good relationship between the franchisor and franchisee is critical for the success of both parties. Since franchising establishes a business relationship for years, the foundation must be carefully built by having a clear understanding of the franchise program.
How Can I Tell If a Business Is a Franchise?
Many franchises have franchisee-operated locations as well as corporate-operated units, so it can be difficult to determine if a local business is a franchise at first glance.
Where Can I Find Legal Support for Franchises?
The International Franchise Association maintains a franchise supplier directory that includes a legal category to help franchisees and franchisors identify attorneys with experience in franchising.
What Are the Most Common Franchised Industries?
Franchises operate in virtually every sector you can imagine. In addition to a large presence in the restaurant and hotel sectors, the most commonly franchised industry categories include service-related fields such as:
Why Should I Support IFA Member Companies?
Companies that belong to IFA must meet certain membership requirements. They must have a satisfactory financial condition and comply with all applicable franchise laws. In addition, all members must agree to abide by the IFA Code of Ethics.