Use this checklist to assist you in performing your due diligence on your shortlist of prospective franchise investments. The Franchise Owner Prospectus should contain:
• Business background of directors & key executives
• Track record of the company
• Description of the franchise
• Breakdown of the initial investment required
• Details of other payments due to the franchisor
• Guidance on raising finance
• Requirements for franchise owner’s participation
• Terms for termination/renewal of agreement
• No. & success rates of existing franchise owners
• Franchisor’s site selection/approval rights
• Overview of guaranteed training & support
• Report on the performance of the pilot operation
• Financial statement from the franchisor
• Details of franchisor’s professional advisersThere’s more here.