Buch, Englisch, 275 Seiten, Book, Format (B × H): 191 mm x 229 mm
A Comprehensive Guide to Due Diligence
Buch, Englisch, 275 Seiten, Book, Format (B × H): 191 mm x 229 mm
ISBN: 978-1-4302-6508-5
Verlag: Apress
Many people dream of opening their own business and being their own boss. But its dauntingwhere do you find the cash? How do you manage employees? Where is the best place to site a store or facility? How do you avoid the rookie mistakes?
Buying a franchise can help take some of the fear out of starting a business from scratch. After all, the franchisor supposedly has a proven model for business success, and many will help with financing. Whats more, nowadays there is a franchise concept to fit anyones tastes: restaurants, accounting services, tutoring, coaching, elder care, party planning, cleaning, and thousands more. Yet as How to Buy a Franchise: A Comprehensive Guide to Due Diligence shows, there are many hidden risks and dangers in buying a franchise, and its essential you know what they are. Failing to understand these risks and to investigate a franchise properly before you buy can turn your American dream into a nightmare.
How to Buy a Franchise offers a practical system you can use to undertake a thorough investigation of any franchise opportunity. Written by attorney Jonathan E. Fortman, who specializes in advising clients on franchise acquisition, the book takes you step by step through the due diligence process. It covers:
- How to find a franchise opportunity that fits your personality and goals.
- Questions to ask franchisors and other franchisees
- Understanding the legal documents franchisors want you to sign
- Your true earnings potential with a franchise
- How to get off on the right foot with your franchise
How to Buy a Franchise will help take the emotion and excitement of becoming your own boss out of the equation so that you do not end up buying on impulse or ignoring warning signs. With a clear-eyed view of the franchise opportunity, your chances of business success rise and you will be much more likely to live your entrepreneurial dream.
Zielgruppe
Popular/general
Autoren/Hrsg.
Fachgebiete
Weitere Infos & Material
Chapter 1: Understand Franchising
Chapter Goal: This chapter explains franchising and the relationship between a franchisor and a franchisee. It also dispels some of the myths about franchising and provides a short glossary of common franchise terms.
Chapter 2: Decide If a Franchise Is Right for You
Chapter Goal: This chapter helps the reader evaluate and explore their personality traits, expectations, and skills to determine whether franchising fits their abilities and whether a franchise agreement will enable them to achieve their goals.
Chapter 3: Determine Experience and Skills Necessary to Operate a Franchise
Chapter Goal: This chapter explains to potential franchisees that despite what franchisors tell you, you do need some knowledge about operating a business, managing people, creating budgets, etc., to properly evaluate a business opportunity. It also shows how to obtain the knowledge you need through experience, education, advisers, or partners.
Chapter 4: Find the Right Franchise for You
Chapter Goal: This chapter shows how to find a suitable franchise opportunity and explores the need to investigate the particular industry (food service, printing services, etc.) that interests you to learn more about the competition, and the industrys practices, economics, and long-term prospects. It then discusses the process of contacting a franchisor and assessing the information franchisors typically provide. It cautions that the goal of the franchisor is to sell franchises and that the potential franchisee must maintain a healthy skepticism pending further investigation of the opportunity.
Chapter 5: Investigate the Franchisor
Chapter Goal: This chapter identifies what prospective franchisees must investigate before purchasing a particular franchise. It will include detailed steps on how to conduct the due diligence investigation, including contacting as many of the franchisors current and former franchisees as possible and asking specific questions (list included). The chapter will also suggest readers engage both an attorney and an accountant at this point and what questions to ask them and what services to seek. It will show how to conduct an effective internet search on the franchisor and industry, and how best to investigate competitors to better understand the market.
Chapter 6: How Federal and State Governments Regulate the Sale of Franchises
Chapter Goal: This chapter will explain the role of the Federal Trade Commission in regulating franchise sales. It will also touch on the role of some of the states that have specific franchise regulations. But it will also caution readers that the FTC or state regulators will provide little or no help if they experience problems with the purchase or operation of their franchise.
Chapter 7: Understand the Franchise Disclosure Document
Chapter Goal: The goal of this chapter is to familiarize the reader with the Franchise Disclosure Document (FDD) required by the FTC to be provided to prospective franchisees. It will generally discuss the various sections of the FDD and set up more in-depth exploration of several key sections of the FDD in subsequent chapters.
Chapter 8: Understand the Franchise Agreement
Chapter Goal: This chapter explains the Franchise Agreement, which is the legal document setting forth the details of the relationship between the franchisor and franchisee. It will explain terms that are common in such agreements and cover Item 9 of the FDD which enumerates the obligations of the franchisee. It will also address the means of dispute resolution common to such agreements, such as mediation and arbitration. The chapter will again emphasize the need to seek professional guidance from an attorney experienced in franchise law, as well as a financial advisor.
Chapter 9: Figure the Costs of Buying and Opening a Franchise
Chapter Goal: This chapter will explain Item 7 of the FDD and the expected initial investment required to purchase and open the franchise location. It will explain to the reader why it is dangerous to rely solely on the figures contained in the FDD and the need to investigate and consider the local market for costs of labor, rent, and other operational expenses. It will explain that one of the most litigated issues in franchising is inaccurate numbers contained in Item 7 of the FDD and how to avoid problems by keeping your eyes open. This chapter also will explore Item 10 of the FDD, which concerns the financing that may be offered by the franchisor and some of the issues surrounding the use of such financing. It will also explore other avenues of possible financing such as the SBA and traditional lenders.
Chapter 10: Add Up Initial and Ongoing Franchise Fees
Chapter Goal: This chapter will focus on Item 6 of the FDD, concerning fees. It will explain that some franchises collect a flat fee while others collect a percentage of the revenue. It will address other issues such as advertising costs and use of required suppliers.
Chapter 11: Estimate the Bottom Line: How Much Money Can I Make?
Chapter Goal: This chapter will focus on Item 19 of the FDD concerning Financial Performance Representations. It will give advice to the reader about the information they can use to evaluate the length of time it will take to break even and then turn a profit. It will also offer cautionary tales about franchisors who assumed that owning a business is a sure route to accumulating wealth, along with stories of franchisees who retired wealthy.
Chapter 12: Consult Franchise Publications and Resourceswith Eyes Wide Open
Chapter Goal: This chapter provides readers with useful resources for the franchisees to use throughout their investigation. It will also warn readers of questionable resources and publications, including ratings provided by publications like Entrepreneur.
Chapter 13: Understand the Dangers
Chapter Goal: This chapter explains what can go wrong at the start of the franchise relationship or even ten years in. What if the franchisor goes bankrupt? What if a fellow franchisee opens up across the street in violation of the agreement? What if the franchisor raises fees or demands other forms of compensation? The author has seen all this and more and provides many tips to keep the relationship smooth and as trouble free as possible.
Chapter 14: Employ a Checklist
Chapter Goal: The final chapter of the book will provide readers with a comprehensive checklist they can use to structure their due diligence investigation. It will include investigation of the market conditions, questions to ask franchisors, questions to ask other franchisees in the system, and financial considerations.
Appendix
Additional Resources. This appendix includes links to free resources that can be used to investigate franchisors, including any prior complaints against the franchisor by franchisees.
Sample Franchise Disclosure Document
Sample Franchise Agreement
