Tips,for,Researching,Franchise business, insurance Tips for Researching a Franchise Business

As we all know to live in this world we have to perform some activity by which we can earn money. There are many activities by which we can earn money and meet the standards to live in this society. And from one of them is franchise.  Franc Small offices have unique needs, and thatincludes document shredding. Designed with the smaller business inmind, the Dahle 20314 is a cross-cut shredder that offers Level 3security and brings you into compliance with federal regulations. The

A franchise operation can be an excellent investment for peopledreaming of self-employment. Franchise opportunities fall into threebasic categories: Product, Service and Wholesale Distribution. Thefranchise you select must be one that will maintain your interestthrough years to come. Not even a lucrative franchise opportunitywill work for you if you find the business dull or boring. However,like all business opportunities, there are risks involved. You'llminimize the risks by doing your homework before you sign on thedotted line.1. Conduct Preliminary ResearchAsk the franchise company to send you brochures, pamphlets andvideos, if possible. Then, locate the nearest two or three franchiseoperations and visit each. Talk with the franchise holder, theemployees and the customers to get their reaction to the product orservice. Hint: Ask the franchisee if he or she would purchase thesame franchise again.2. Study Company DocumentsUS franchisors are required by law to provide you with documentsoffering full disclosure of the franchise opportunity. (Laws maydiffer in other countries). These documents could be called theOffering Prospectus (OP), the Disclosure Document or the FranchiseOffering Circular. These papers provide you with a wide range ofinformation about the franchisor. Look for a company that is threeyears old or more. Senior executives should have positive businessexperience in the franchise field and have a good record regardingprevious litigation and bankruptcies.3. Consult with Business ProfessionalsTake the OP, the Disclosure Document, and the franchise contract toan accountant, attorney, management consultant or other businessprofessional for analyses of the financial and legal aspects.4. Learn the Franchisor's Policy Regarding Territory ProtectionYou'll want to know the franchisor's policy regarding the number offranchise unit's they'll establish within a geographic area. Do youhave a protected territory? You don't want to discover that thecompany has established a similar unit across the street from youroperation. Additionally, some franchisors also open and operatecompany owned stores as well as the franchise outlets. What's theirpolicy regarding company stores?5. What Fees Must You Pay?Expect to pay an initial franchise fee (often non-refundable), as wellas fees for startup expenses, inventory, licensing, insurance, and a"grand opening fee" for initial promotion. Anticipate annualexpenses such as royalty fees and marketing fees. Find out whatportion of your advertising fees goes to your own outlet and whatportion goes to national advertising. Hint: Ask about hidden fees.6. When Will You Break Even?Based on your investment and the breakeven analyses in the OP,how long before you reach the breakeven point and start making areturn on your investment? Do you have financial strategies that willallow you and your business to survive until the breakeven point?What sort of profits might you reasonably expect to make?Franchisors are not required by US law to offer profit projections totheir franchisees. However, if they do, they are required to base theirprojections on concrete research.7. How are Conflicts Resolved?Is there a Conflict Resolution Policy in place? What do otherfranchisee's say about the company's approach to addressingconflicts? Under what circumstances can the company terminateyour contract? If your contract is terminated, will you lose yourinvestment? When will the contract be up for renewal? Hint:Franchise contracts that are renewed do not necessarily keep thesame terms as the original contract. Terms could be less favorable.8. Will the Franchisor's Advertising Campaign Benefit You?You are required to pay a fee towards the franchisor's advertisingcampaign. Find out the extent to which this campaign will benefityour outlet. Do you have any control over how the advertisingdollars are spent? Can you conduct your own advertising? Do youneed permission to do so? Do franchisees benefit from anycommissions or rebates that the franchisor receives?9. What's the History of Failed Outlets?Before investing, find out the number of outlets that have failed.High numbers could indicate systemic problems. Be aware that somefranchisors will disguise failed outlets by turning them intocompany-owned stores. If you are purchasing an existing outlet, besure to find how many previous operators have operated the serviceand why they left. Hint: Conduct interviews with people who haverecently left or joined the franchise. Be sure to ask if the franchisecompany is delivering the promised supports and services.