This section details what company is the franchisor and their history Look for a company that has been in business for at least a year Is the company a one-person operation or large corporation
The litigation section lists cases pending against the franchisor. Watch for numerous suits from franchisees
These sections detail initial franchise fee, payments, ongoing fees, and total initial investment Watch for hidden fees in the agreement Make sure you’re aware of payment due dates
This section details what assistance is available for financing the franchise. Some franchisors will help finance the contract
This section details what you will receive as a franchise. This could include: Site selection Management assistance Training Software/database access Merchandising ideas
This section details whether or not your franchise would get an exclusive territory for operations Make sure you get exclusive territory to operate
This section details the length of the contract and how it can be renewed or terminated Watch for long periods (50 years for Putt-Putt) Make sure you have an ability to get out of the contract if needed
This section details averages for sales, profits, or earnings Illegal to promise earnings, so no actual figures should be provided Find what percentage of franchisees have had the sales, profits, or income claimed by franchisor
Make sure you read the circular as well as having a lawyer read it over
Self analysis Choose product/service Seek likely franchises Investigate Other franchisees Third parties Franchisor Have lawyer review Sign agreement