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| Internet Franchise Guidance |
Introduction
By joining an Internet franchise you already have a better chance of starting a business that has a proven model of success. There are many internet franchises to choose from, from online casinos to creating easy web page templates for companies to use. The internet is here to stay, and so are internet franchises, the potential market for internet franchises will continually increase.
Before joining any franchise consider the following:
Warning signs
Most franchisors are likely to be open and honest with you. However, you should be wary of those franchisors who:
• are reluctant to provide any information in writing
• are reluctant to give details of the other franchisees within their system
• require full up-front payment for the business to be made before any information is released
• claims that you can make large amounts of money quickly and with little effort—that is, it looks too good to be true.
Disclosure
• Did you get a copy of the Franchising code of conducts?
• Did you get a copy of the franchisor’s disclosure document?
• Does the disclosure document contain all the information required under the code of conduct?
• The disclosure document should contain the following information about the franchisor:
o business name, name(s) of company
o director(s), contact details
o business experience
o current proceedings against the franchisor of the kind
o a list of existing franchises including contact details trademarks or other intellectual property
o details of the franchise site or territory
o marketing or other cooperative funds prepayments and establishment costs arrangements for supply of goods or services the franchisor’s and franchisee’s obligations financial details, which may include earnings information.
Before you sign
• Is it the right opportunity for you? Assess your skills, strengths and weaknesses thoroughly when deciding to buy a franchise.
• Get professional advice from an accountant, lawyer or other business expert who has experience in franchising before making any commitment.
• Get and verify as much information about the financial details of the business as possible.
• Check with the franchisor about training and the level of support the franchisor will provide to you at the early stages.
• What is your position at the conclusion of the franchise period?
• Who will own the goodwill in the business?
• Ensure you have an exit strategy should the franchise agreement not be renewed.
• Check clauses regarding termination, renewal and transfer of the franchise and make sure you are willing to accept them.
Conclusion
Plan well and obtain good advice before entering a franchise. Take time to research the franchise carefully so that you can make an informed decision. If you choose not to seek advice, you will have to provide a signed statement to that effect.
The DoDotz Open Source Franchise – You won’t get anywhere in life working for somebody else. |
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