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Ready to sign? Factors to consider in a franchise agreement
Sep 22, 2011
Before you sign that franchise agreement make sure you read the three tips that Entrepreneur.com.ph has compiled for you.
While you can be sure of the franchise brand you are about to sign up for, are you sure about what the franchise agreement stipulates?
Read the entire agreement once again, page by page. And oh, read our three tips below and you'll thank us afterwards:
• The site location.
If you can, visit the site being offered to determine if it’s going to work for you.
• The projected financial study.
You have to arrive at a projected financial study with the site at hand. Ask the franchiser to help you crunch the numbers. You’ll need to know where your customers will be coming from and the projected sales you’ll be making from the outlet. Remember that no franchiser ever guarantees your income.
• The franchise agreement.
This is the most important document you’ll have to study, so take your time. This agreement spells out your obligations to the franchiser and his obligations to you. Read every page at least three times for at least 10 days. Underline the sections you don’t fully understand, then get a lawyer familiar with franchising to explain them to you. As soon as you are ready, set a meeting with the franchiser and have him explain the agreement and its contents. The agreement is a very comprehensive document. Don’t sign it unless you’re 100 percent sure about what you’re getting into.
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