There are numerous books, articles and blogs that provide advice on how to evaluate a franchise opportunity. A common thread that runs through is the recommendation that before a prospective franchisee invests they must review and validate the information disclosed in the Franchise Disclosure Document and obtain feedback from franchisees. This approach is an effective way to evaluate a franchise and when coupled with the assistance of professional advice can be an effective way to evaluate and protect your franchise investment. However, to complement this approach I would advise prospective franchisees to dig deeper into the franchise and gather more information.
Looking beneath the surface
When evaluating a franchise opportunity, it’s important to get as much facts as possible. In most cases this means digging deeper.
60% of franchisors provide a financial performance representation (“FPR”) under Item 19 in their Franchise Disclosure Document.
As part of a franchise candidate’s due diligence process, it should be expected that certain questions will be directed to franchisor staff.
It was quickly apparent that some employees struggled working from home. They had never experienced the challenges associated with time management.
Detailed studies on emerging franchise success rates, errors in Item 20 disclosure and sector performance, Franchise Grade’s reports help you.
There have been various changes in average franchise investments during this time, some changes were more dramatic than others.