Checklist For Selecting A Franchise

1. Study each franchise’s Franchise Disclosure Document, looking at the company’s financial health, territory rules, litigation history, licensing agreements, royalty structures, and turnover within a franchise system.
2. Ask questions if a franchisor has significant litigation issues or appears to be on weak financial footing.
3. When talking to current and former franchisee owners, do not look for the answer you want to find. Find out how long it took franchisees to break even.
4. Do not expect to draw a salary during your initial months of franchise ownership. Make sure you have enough capital to fund up to nine months of personal living expenses.
5. If considering investing in a new franchise concept, make sure the concept has organizational and financial staying power.
6. Find franchising-related documents at www.openfran.org.
7. Join Web-based discussion forums such as those at www.franchise.org to learn about the potential advantages and pitfalls of franchise ownership.
8. Go to the Small Business Administration Web site at www.sba.org to learn about programs and services for small business owners and veterans.
9. Use search engines such as http://blogsearch.google.com/blogsearch to unearth discussions about franchise ownership.