CHECKLIST

30 THINGS TO CHECK BEFORE YOU INVEST R

Are you confident in the franchisor?

Have you seen a disclosure document?

Is the franchisor compliant with the Franchising Code of Conduct?

Have you run a credit check on the franchisor?

Does the franchisor have a history of litigation? Are there any cases coming up?

If you are buying an exist ing business, have you seen cu rrent financial statements (balance sheets, profit and loss, tax returns)?

Have you evaluated the finan cial returns?

If you are buying a greenfield (brand new) site, do you have sales and profit examples and know the method behind the calculations?

Do yo u know all the expenses franchisees are required to pay?

What royalties are there and how are they calculated? Have you worked out your operating costs?

Do you know the term of the agreement?

Do you need a permit or license to operate the business?

Is the business operating from fixed or mobile premises? What are the franchisee and franchisor obligations?

What training is available and who pays for it?

Who owns the intellectual property and what is licensed to the franchisee?

What marketing will the franchisor implement?

Have you checked the lease? Is there a right to renew?

Does the length of the lease match the franchise term?

What are the store fit-out costs?

Are you working within a territory? If so is the area ex clusive?

Are you restricted in your product purchase?

Are you required to reach a minimum performance level? Wh at marketing is your responsibility?

What is the dispute resolution process?

Do you know what it is like to be a franchisee?

Do you have an exit plan?

Have you spoken to former and current franchisees about the business?

What restrictions are there on the franchisee and guarantor operating a similar business?