In order to run business smoothly, franchisee and franchisor need to have an open and transparent system. They have to be accountable for their roles and responsibilities, which should be clearly defined and verified from time to time. Practically, franchisee and franchisor should interact at least once in a month to see if everything is moving in the right direction.
Some essential invariants that a franchisee should look forward and expect from a franchisor are provided as a checklist. See below for the 5 things franchisee should look in franchisor:
1. Type of Business: Remember the golden rule, the simple the business is the more are the chances of its being successful. Franchisee must enquire about the business and how it operates and functions.
2. Business Structure and Strength: Even in the preliminary communications any person who wishes to take up a franchisee must enquire about the business structure and strength. It gives an idea of the proprietorship and the likely nature of relationships that would be between the franchisee and the franchisor.
3. Offer: Straight to the point, ask about the offer and opportunities the franchisor provides. See to the franchising model, business format franchising, product line franchising, unit franchisee, master franchisee, etc.
4. Requirements: The franchisee must ask about the requirements and that must be all inclusive. Ask about the level of commitment, the capital required, office space or land required, etc.
5. Profile or Portfolio of the Franchisor: The business profile of the franchisor gives an idea of the performance and projections.
A person or group of individual must not hesitate in enquiring about the particulars. Some franchisors involved in litigations and tend to hide some facts. Franchisee has to be careful and have a proper background check. The 5 things franchisee should look in franchisor helps to remain in track.