What is Needed When Considering a
Franchise Business Opportunity :
• Research the franchise brand , both online and directly with existing franchisees in the network to establish if the franchisor has a good reputation with a proven track record .
• As a prospective franchisee and investor ask yourself the question “ do I have the necessary experience to enter into a business in this particular sector ?”
• Be absolutely certain of the capex requirements and how much of the total cost can be financed . Many franchise opportunities attract a great deal of interest , but interest can only be converted into a franchise deal if the prospect has the requisite capital or access to the necessary funds .
• What are the ongoing monthly fees ? These would include royalty , marketing and any additional back office fees .
• Check the legal requirements and be sure that you understand and comply with all of them .
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• Ask the franchisor what ongoing support you will receive .
• Understand the risks . A good franchisor will provide and updated Franchise Disclosure Document that will detail , amongst other things , the financial performance of the brand as well as the success and failure rate of the franchise brand .
• Do a thorough review of the Franchise Agreement and ask for explanation on any clauses that you don ’ t understand or agree with . If necessary , refer the agreement to a legal practitioner for review and advice . It is important to understand the dispute resolution process .
The IWG franchise model presents an opportunity to diversify away from traditional franchise industries , and benefit from strong cash returns and significant returns on investment . For the first time landlords , multi-franchise operators , REIT ’ s and high net-worth individuals can enter this exciting industry in partnership with IWG , the world ’ s largest provider of flexible workspaces .
I want to be a franchisee
SA Real Estate Investor Magazine FEBRUARY 2021 11