Part 4: The Purchase ProcessSo you’ve decided on which franchise you are going to buy. You’ve done all your research and now you have told the brand you want to buy….What is the next step in the sales process?
Well the next step is to fill out an application form if you haven’t already. A lot of brands, especially the bigger ones, take this very seriously. Make sure you put as much information as you feel comfortable with putting on the form. Read them carefully and make sure you ask the consultant exactly what sorts of things the franchisor is looking for.
Once this application has been approved the franchisor will then probably interview you. At the interview you will have the process explained to you in more detail. Every franchise is different but all have to follow the Franchise Code of Conduct. As such there are some basic steps that will always be the same.
You need to be presented with the following documents:
- Franchise Agreement
- Franchise Disclosure document
- Franchise Code of Conduct
You may also get other documents that need addressing like copies of the site Lease etc. All of these should be advised on by a professional. A good tip is to find your lawyer before you decide on your franchise, that way you are prepared and things aren’t rushed.
You may also be required to pay a deposit at this time. This is perfectly normal and is a sign to the franchisor that you are serious. Unfortunately there are a lot of window shoppers out there. Legal agreements etc cost money to produce and a franchisor wants to ensure you are not wasting their time.
This deposit is 100% refundable for the 14 days. After that there may be penalties but those must be stated in any agreements.
Once the 14 days is up the franchisor will expect you to sign the franchise agreement and possibly pay some more money. Remember once you sign the franchise agreement you are bound by it. You do still have a further 7 day cooling off period. However the franchisor is entitled to withhold any expenses that they might have accrued in the process including legal fees, brokerage fees, printing etc. You really need to make sure that when you sign the agreement you have had all your advice and are confident that you are making the correct decision.
Once all the formalities are finalised its time to get ready for training
Written by Elton Williams