Choosing a Genuine Franchise
With so many businesses offering franchise right now, how can anyone distinguish the good ones from the bad? What are some warnings signs that an aspiring franchiser should look for? according to the article I read, you should need to know the track record of the company. Seek out some it’s franchisee and ask them about the company so you will be warned before hand if you should continue negotiating with them. There are businesses that are hesitant to let you on their offices and don’t want to give access to other franchisees or worst, don’t have any franchisees at all. So just take the necessary precaution.
Other obvious signs of an erring company are those who insist on signing their franchise agreement and fees as first in the agenda. Also, the tactics of hard selling like guaranteed payback and 100% success. Usually, in the qualification process the payment and signing should come later. Not the other way around because if you don’t qualify, then why should you pay first? Those that don’t screen their applicants looks very suspicious and seems that there isn’t any good system at all.
Major red flags you should be aware of are:
- Absence of a brand name or trademark.
- No registered trademark with SEC (Securities and Exchange Commission). IPO (Intellectual Property Office), and the DTI (Department of Trade and Industry).
- Absence of a company owned store
The last part seems very obvious because if there are no store you see as the mother company, how can you be sure that the franchise system works? A successful company owned store is a proof that the their system really works. After all, it’s only the system (their business formula) together with their brand name is what you paid for.