Before signing a franchise agreement, it is critical that you fully understand the commitment you are making.
This entails thoroughly researching your decision (also known as conducting due diligence) to ensure you make an informed decision.
It is critical to seek professional advice as part of this process, and the Franchising Code of Conduct (the Code) encourages this by recommending that you seek accounting, legal, and business advice.
The Code also requires a minimum 14-day period from the time the franchisor provides you with a disclosure document before you can legally sign a franchise agreement, giving you time to seek legal counsel from franchise agreement lawyers.
If you feel you are still not ready after 14 days and need more time to seek advice and conduct additional research on the franchise offer, don’t be afraid to tell the franchisor or broker.
Any attempt to rush you into signing a franchise agreement before you are ready should be avoided.
Similarly, if you decide during the disclosure time that the franchise you’ve been investigating isn’t right for you, you should gracefully exit the process before incurring any additional expenditures.
Here are five pointers to help you with your research:
Identify your target market
Entering into franchising without adapting franchise aims to a specific market is a difficult task. A target audience can be a broad group of individuals or a specific demographic, but finding a way to curate a product or service for this group can ensure that all business operations are directed toward the same end goal. With a set consumer perception in mind, marketing strategy, product development, and employee training can all be guided, saving time in the early stages of a franchise.
Contact the franchising lawyers for a consultation if you have any questions regarding doing franchise due diligence.
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