Franchise Buying FAQs

1. Q: What is a franchise?

A: A franchise is a legal and commercial relationship between the owner of a trademark, service mark, trade name, or advertising symbol and an individual or group wishing to use that identification in a business.

2. Q: How do I choose the right franchise for me?

A: Choosing the right franchise involves considering factors such as your financial capacity, skillset, interests, and lifestyle. Mariel Miller can guide you through this process, helping you find the right match.

3. Q: What are the costs involved in owning a franchise?

A: Costs include the initial franchise fee, setup costs, ongoing royalties, and advertising fees. The amounts vary depending on the franchise.

4. Q: What is a Franchise Disclosure Document (FDD)?

A: The FDD is a legal document that franchisors must provide to prospective franchisees. It contains information about the franchise, such as its history, financial statements, and agreements.

5. Q: What is a franchise agreement?

A: A franchise agreement is a legal contract between the franchisor and franchisee that outlines the terms and conditions of the franchise relationship.

6. Q: Can I own more than one franchise unit?

A: Yes, many franchisees own multiple units. This is called multi-unit franchising.

7. Q: Do I need industry experience to buy a franchise?

A: Not necessarily. Franchisors provide training and support, so industry-specific experience is not always required.

8. Q: What kind of support can I expect from a franchisor?

A: Support varies by franchisor but typically includes training, operational support, marketing assistance, and ongoing advice.

9. Q: What is a royalty fee in franchising?

A: A royalty fee is an ongoing payment made by the franchisee to the franchisor, usually a percentage of gross revenue.

10. Q: What is the term of a franchise agreement?

A: The term varies but is typically between 5 and 20 years, often with renewal options.

11. Q: Can I sell my franchise?

A: Yes, franchises can usually be sold, subject to franchisor approval and terms in the franchise agreement.

12. Q: How much money can I make as a franchisee?

A: Earnings vary widely depending on the type of franchise, location, and your management skills.

13. Q: What is a territory in franchising?

A: A territory is a specific geographical area where you have the exclusive right to operate your franchise.

14. Q: Can I negotiate the terms of the franchise agreement?

A: Most franchise agreements are standard and non-negotiable, but some terms may be open to negotiation.

15. Q: Do I need a lawyer to buy a franchise?

A: It’s highly recommended to engage a lawyer experienced in franchising to review the franchise agreement and FDD.

16. Q: How long does it take to open a franchise?

A: The timeline varies by franchise, but it typically takes several months from signing the franchise agreement to opening day.

17. Q: What are the risks of owning a franchise?

A: Risks include financial loss, time commitment, the potential of franchisor failure, and market risk.

18. Q: Can a franchise fail?

A: Yes, like any business, a franchise can fail. However, with proper due diligence, selection, and management, risks can be mitigated.

19. Q: What does “turnkey” mean in franchising?

A: A turnkey franchise is one where the franchisor provides the complete setup for the business, allowing you to “turn the key” and start operations.

20. Q: How do I start the process of buying a franchise?

A: Contact Mariel Miller for a preliminary consultation. She can guide you through the franchise selection process, ensuring you make an informed and confident decision.