A Guide to the Franchise Disclosure Document – What to Ask Franchises For Sale

When looking for franchises for sale in the UK you should be aware that all franchise offers have to disclose a document to all prospective buyers a certain amount of time before any contract can be signed. Make sure that your read the entire document and understand all of the criteria enclosed within the franchise opportunity. We are now going to look over the first set of criteria that needs to be researched that will be included in the document. This first set of criteria will help you get a clear idea of what to ask the franchise before you sign anything.

We will start off by looking at the background of the franchise. In the document it must state that directors of the business and what they have done previous, take into account not only their business experience but also their experience in running franchise systems. The document should also state how long they have been with the business and show their track record with this company. Looking at franchises for sale with an inexperienced franchise owner is more of a risk than investing in an established experienced franchise owner.

The next criteria that the document takes into account is the legislation regarding the franchise and the franchise directors. The information in the document will detail any convictions like fraud, business law, or other similar offenses in the UK. It will also detail if the current franchise has any involvement with law cases or civil actions in the franchises history. If any of these come up in the document and a number of cases have been reported this will indicate that the franchise has not been living up to their agreement and the franchisees have been unhappy with the service offered. There has been cases where names have been withheld from this document to hide old cases concerning the individual.

The document will detail any circumstances involving the directors or the franchise itself and whether they have been declared bankrupt at any time. This information will help you gain a better understating of the financial security of the franchise opportunity and help you anticipate if the franchise is capable of upholding all of their promises.

The final section we look into in this article is the criteria of restrictions that will be in the document. When looking for franchises for sale you will always come across restrictions with every franchise. These restrictions will be a good starting point when choosing a franchise opportunity. They restrictions limit how you manage and operate each franchise, the document should detail information like where you will purchase your products from, the products you sell, the customers that you sell the products too and in which location you are allowed to sell your products in. You must understand these restrictions before signing any agreement as these will be the basis of how you operate the franchise and in the long run make it successful. Probably the most significant restriction is location, the franchise may have numerous outlets in a county and the restrictions of opening a franchise in a certain area may be beneficial for one franchisee but severely damage the income of another franchisee if opened close by.

Source by Paul Makepeace