Franchise Selection Do's and Dont's
By Howard Bassuk

Here are a few practical hints to help you select a franchise:

Do:

• Talk to and visit as many franchisees as possible.
• Talk to and visit the franchisor and get to know the history and experience of the Officers and Managers.
• Consult any and all advisors that you feel can be helpful to you, including a franchise attorney.
• Ask any and all questions you can. Nothing is too trivial to ask.
• Take your time, and be very thorough in your investigation.
• Do comparative analysis of other franchises in the same, and other, businesses.
• Evaluate yourself as compared to other franchisees that you meet and talk to. You make a difference! Make sure youíre comfortable with what you have to do.
• Read and understand the sales literature, Uniform Franchise Offering Circular, etc. Know all the terms of your agreement.
• Give yourself plenty of room to maneuver financially. Plan for more expense and slower profitability than you think you need.
• Avoid surprises. Be thorough; be conservative; be informed.
• RESEARCH, RESEARCH, RESEARCH. The more you know, the better your decision is likely to be. Remember, only you can determine if any franchise is the right one for you.

Don't:

• Hurry. Short-cutting your research can increase your likelihood of failure.
• Over-extend, or be optimistic about your personal finances. Be realistic, and if anything, conservative.
• Skip consulting professionals. Saving on fees may deprive you of information critical to making a good decision.
• Settle. Get the business that you want, not the first one that comes along.
• Take anyone's word. Find out for yourself. Itís your money, your risk and your opportunity. You know best what you need, so investigate first hand.

What is the franchise business?

The franchise business is basically a licensing system by which the owner (licensor or franchisor) of a product or service licenses others to market his product or service (franchisees) within a defined territory following the guidelines established by the licensor.

There is virtually no product or service that is not available to the consumer through a franchise business.

Many of the finest brand names we know are sold through franchise outlets. In addition to being a widely diversified business, it has been part of the business scene in this country for over 100 years.

It is an $800 billion* retail business with outlets employing over 9 million people. It includes inns, hotels, automobile service stations, restaurants, department stores, beauty salons, advertising and publishing enterprises, car dealers, clothing stores... almost any field you can name.

Operations which are franchised provide a number of benefits such as training, start-up assistance, purchasing power, marketing programs, tested operating systems, and continued support, all part of a ìsafety netî for individuals entering the world of the franchised business owners.

The benefits to you as a franchisee:

• YOU own an independent business, dealing in a proven and known product or service sold under a national name.
• YOU can start your own business with limited experience and capital.
• YOU buy a proven franchise business, so you can achieve a significant return on your investment.
• YOU will enjoy high prestige in your community.
• YOU are provided material for local advertising and promotion to supplement national advertising.
• YOU are given all necessary training.
• YOU can save through group buying of supplies, equipment, printing, etc.
• YOU can enroll in an excellent group health insurance plan for you and your family.

* Source: International Franchise Association, Washington, D.C.