Frequently Asked Questions ::

If you are thinking about buying a franchise these are some of the Frequently Asked Questions:

How did franchising begin?

Franchising in North America originated in 1851, when the Singer Sewing Machine Company granted distribution rights to sell their machines. After WWII, business format franchising appeared on the scene, in which the Franchisor grants not only the right to use its name and sell its product or service, but also its entire method of doing business, including operating procedures and training techniques. Today, business format franchising is usually what is meant when one refers to franchising.

Is franchising right for you?

Franchising can be an exciting opportunity to own your own business, but it is not for everybody. Take the Self-Assessment Test to see if franchising might suit you. Before making any decisions, investigate thoroughly: a franchise agreement is usually a long-term undertaking. Be sure before you commit a substantial amount of money and perhaps the rest of your working life that you have made a well-informed decision.

What kinds of franchises are available?

There are over 750,000 franchise businesses in North America in 70 different product and service categories. Franchise businesses are available to suit almost every interest and financial capability.

Why buy a franchise instead of going into business on my own?

A franchise is usually an established concept with a recognized brand name. An independent business must spend money to generate customer awareness as well as developing a business format. As much as eighty per cent of all new businesses fail. The failure rate falls sharply in the case of a franchise operation.

How much can I make?

Although franchises generally tend to be more successful than independent businesses, the profit you will make usually depends on your commitment to the business and your ability to run it properly. Nevertheless, it is advisable to obtain a statement of typical franchisee earnings and interview other franchisees in order to gain a clearer picture of the franchise’s profitability.

How do I research the franchise?

Most franchises offer standard disclosure documents that contain information on the history of the franchise and its principals, as well as audited financial statements and a copy of the franchise agreement itself. Talk to other franchisees and, if possible, meet with the Franchisor and the people with whom you will be dealing in the future. See Questions to Ask for some tips on investigating a franchise opportunity.

Can I afford it?

Take the Financial Capability Test to determine your net worth and available liquid capital. You must have enough money to open the business and run it until it shows a profit. Make sure you receive professional advice throughout the entire process of buying a franchise.