The following list is definitely not exhaustive. However, from our experience, it is definitely a great step forward in the right direction and helps you to avoid many common costly mistakes.
- Engage a team of professional advisers, include an accountant, lawyer and, if needed business consultant.
- Research. Is this the right system for you? Is the franchisor reputable? Does it really suit me?
- Call and speak to other past and present franchisees in the same system, find out what are the positives and negatives.
- Make sure you can afford it. Consult with your accountant and finance provider.
- Get the right business and tax structure in place. See your accountant and lawyer.
- Make sure the numbers stack up. Ask your accountant should do a thorough due diligence.
- Take notes on the conversations you have with the vendor, franchisor and selling agent.
- Ask your lawyer to do a thorough legal due diligence.
- Read the key documents, like the Disclosure Document, Franchise Agreement, lease/licence and loan/security documentation. Ask your accountant and lawyer to assist.
- Really understand your rights and obligations and what it is you are buying. If you are unsure, then get the right advice and assistance before you sign anything. There are real legal, commercial and financial implications to buying a franchise. Be careful and don’t take marketing information and representations for granted.
The Australian Competition and Consumer Commission also publishes a Franchisee Manual. It provides useful and detailed information on what franchising is, franchisee rights and obligations, how to research and what to do if there is a dispute. The Franchise Council of Australia’s website is also a useful reference tool.
We have many years of experience in the franchising industry. Please contact us should you have any questions or require any assistance.