Franchising FAQs

How can I go about investigating a particular franchise that I am interested in?

• Request an information packet from the franchiser.

• Interview owners of current franchises.

• Research the industry and other franchises in this industry.

• Seek expert advice to better understand the franchise agreement.

• Review costs related to getting into this franchise and compare them to the costs of starting a nonfranchised business in this industry.

Within the same industry, why does it cost so much more to get into some franchises than it does others?

• The more expensive franchises are better known in the marketplace, therefore they can command a higher price (oftentimes you are buying into the value of a well-known name). The less expensive franchises may not have any name recognition and are therefore looking to expand their presence in the market by offering their franchises at a much lower price.

• The more expensive franchises probably have proven formulas for success, which means your investment risk factor will be lower than it would be for a less proven franchise system.

• Also, you will find that those more established franchises that have experienced a long history of advertising and promotion of their products have, in turn, created a higher level of demand for their products, which results in a premium price for their franchise.