This is a common phase, any franchisee (buyer) goes through
during the initial days of decision making and it is also an
e...
Is the Franchise new or have existed for some
time?
If it is an existing franchise, sales reports, annual
reports and othe...
3
4
Who is responsible for Advertising?
If the franchisor is taking complete advertising
responsibility or not, as some fr...
5
6
Is product patented and will it be shared with
you?
It is important to ensure that the trademark and
all the other int...
7
8
How is Franchisor relationship ties with
Suppliers?
Dependence on suppliers, past history of supply
ties, supplier’s a...
9
10
What is the suitability of the business in local
market if the Franchise has entered same afresh
from another country...
11
12
Does the Franchisor comply with Franchising
Code of Conduct and the registration laws as
applicable?
Analysing if fr...
Indian Institute of Hardware and Technology (IIHT) believes in
total transparency in business and encourages its prospecti...
Corporate Headquarters
#15,Sri Lakshmi Complex, 4th Floor, St. Marks Road, Bangalore - 560 001. India
Tel: 91 80 6160 4545...
Evaluating the Franchise and Franchisor for Authenticity!!!
Upcoming SlideShare
Loading in …5
×

Evaluating the Franchise and Franchisor for Authenticity!!!

366 views

Published on

The decision to venture into a new franchise must be carefully thought through and analyzed. Evaluating a franchise not only helps in measuring if the claims of a franchisor are legitimate but also helps in understanding the business better.

Published in: Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
366
On SlideShare
0
From Embeds
0
Number of Embeds
33
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Evaluating the Franchise and Franchisor for Authenticity!!!

  1. 1. This is a common phase, any franchisee (buyer) goes through during the initial days of decision making and it is also an essential phase. The decision to venture into a new franchise must be carefully thought through and analyzed. Evaluating a franchise not only helps in measuring if the claims of a franchisor are legitimate but also helps in understanding the business better. This article helps aspiring franchisees by providing them a tool that will aid in evaluating a franchise business.
  2. 2. Is the Franchise new or have existed for some time? If it is an existing franchise, sales reports, annual reports and other financial reports could provide information on performance, growth and trends of the business. Are there obvious Competitors? Competitors refer to the franchises of the same business, for which exclusive and non exclusive territory rights of individual locations and site selection needs to be analyzed. This information must be available in the Franchise Disclosure Document. 1 2
  3. 3. 3 4 Who is responsible for Advertising? If the franchisor is taking complete advertising responsibility or not, as some franchisors will advertise at nation, state and county wide and not the location specifically. However it is important that franchisor does take responsibility for any size of the region where there is more than one franchise. On what basis are the products priced? In case of products being manufactured or supplied by an external source then pricing strategy needs to be carefully analyzed.
  4. 4. 5 6 Is product patented and will it be shared with you? It is important to ensure that the trademark and all the other intellectual property unique and are patented. It is important to ensure that there are no pending approvals for patent rights or chances of cancellation of same. What is the market trend and potential growth? To analyse if the product has seasonal trend, life of the product and the demand analysis is important.
  5. 5. 7 8 How is Franchisor relationship ties with Suppliers? Dependence on suppliers, past history of supply ties, supplier’s ability to surpass franchisor in producing similar product have to be learnt. What is the reputation of the product and service? If the product and service has established favourable reputation, investing in such business may reduce venture risk much further.
  6. 6. 9 10 What is the suitability of the business in local market if the Franchise has entered same afresh from another country after being successful there? Ensure that a product test has been conducted scientifically to assess the needs in local market. What and how of the relationship between Franchisor and existing Franchisees? Franchisor is required to provide references for an evaluation by existing franchisees. Personal inquiry in understanding the relationship between the parties is essential.
  7. 7. 11 12 Does the Franchisor comply with Franchising Code of Conduct and the registration laws as applicable? Analysing if franchisor has met all compliances - has to be part of the evaluation process. And to check if all the licensing and registration has been done is the franchisee’s responsibility. Is there access to third party evaluation? Find out if a franchisor would allow third parties like franchising consultant/lawyer to evaluate their business.
  8. 8. Indian Institute of Hardware and Technology (IIHT) believes in total transparency in business and encourages its prospective franchise business partners in exploring IIHT Technologies as a business. It further invites prospective partners to visit India for personally observing and evaluating the business. For more information on IIHT Technologies please visit www.iihttechnologies.com.
  9. 9. Corporate Headquarters #15,Sri Lakshmi Complex, 4th Floor, St. Marks Road, Bangalore - 560 001. India Tel: 91 80 6160 4545 e-mail: franchise@iihttechnologies.com web: http://www.iihttechnologies.com/

×