Buy a franchise

How to purchase a franchise

There are a number of key things you need to consider when planning to buy a franchise. It is worth thinking about the following:

  • Assess yourself to see what kind of franchise, if any, will suit you.
  • Find out what franchises are available and draw up a shortlist.
  • Assess franchise opportunities carefully, ask questions and talk to other franchisees.
  • When you find a business, investigate its financial prospects. Base this on thorough research of performance figures. Include an analysis of three years' accounts - if they have been trading for that period - and management figures.
  • If you'll need to raise finance, ask your bank if it will consider a loan for the type of franchise you're considering.
  • Do your own market research into the business and the competitors in your area.
  • Draw up a business plan.
  • Check the franchise agreement and get professional advice.

However, it is advisable to make sure you don't:

  • take up the first opportunity before investigating alternatives
  • allow yourself to be hurried into making a decision
  • pay any non-refundable deposit
  • commit yourself before you're completely sure
  • assume a business will work in your area just because it works elsewhere
  • rely on the forecasts provided by the business selling you the franchise
  • sign any agreement without legal advice

Subjects covered in this guide


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