Be a new or an existing franchise buyer, the key research and analysis is an essential to identify a franchise business.

2. An Extensive Research
Third Party Evaluation
Determining if a specific franchise ‘is
for you’ is a task that is complex, you
might chose an industry that you are
passionate about, knowledgeable about or
simply the one that you find most
profiteering. It is however important to
assess and take precautions prior to
purchasing a franchise.
Understanding the Pros and Cons

3. “AN OUNCE OF PREVENTION IS WORTH A
POUND OF CURE.”
BENJAMIN FRANKLIN
An Extensive Research
Third Party Evaluation
Understanding the Pros and Cons

4. You need to conduct an extensive research on numerous franchises,
collect data on company profiles, financial trend, audited
records, company litigation histories and the like. Conducting an
analysis of year on year histories, financial trend and franchise
performances is a crucial step. A comparative analysis between
the competitors has to be a part of this research. As a
buyer/franchisee you also need to learn about reviews by
institutes recognised for their ranking in the respective
industry. A critical analysis of the franchisor, the brand value
and verification on the claims that a company makes should be a
major step before selecting the franchise.

5. Third party evaluation is also a
recommended step for franchise buyer.
Third party evaluation could be of various
types, depending on the cost you are
willing to incur. Third party could be a
franchise consultant/broker, a lawyer, an
adviser, a stakeholder of the said
franchise, the existing franchisees and
the like.
An expert view of course is an important
factor to make the decision of buying a
franchise. The entire purpose of a third
party evaluation is a second opinion. And
such evaluation should focus on not just
the analysis that you already have
conducted but also bring out points that
you have missed. Consulting with a
franchise broker or a franchise consultant
would be a good idea if you are purchasing
a franchise for the first time. The
franchise brokers/consultant has pre
defined process for helping the budding
entrepreneurs.

6. A personal interview and an evaluation could be
conducted on the basis of reviews, opinions provided by
various stakeholders of the franchisor, such as
partners, clients and other franchisees. Existing
franchisees may share personal experience however
getting opinions from more than two franchisees is
considered appropriate. Secondary data from ranking
authorities would also provide an agreeable sum of
analysis.

7. Franchise business too comes with its own pros and cons. The
best way to deal with same is to acquire complete knowledge of
the business and take complete precautions in avoiding a
purchase of a franchise that you will not be able to cope
with.
The documents released by the franchisor provide detailed
information on the history of operations, finances and
performance. The terms and conditions are also shared with the
prospective buyer. These documents could help you understand
if you would be able to work under such terms and conditions.

8. Sometimes franchisors may allow lax on their commitment
to support the franchisee. At the same time there could
have been poor decisions made by franchisor causing
adverse effect in the franchisee.
Hence to ensure that you buy in to a right franchise
you need to understand the franchisor’s attitude
towards the business and the franchisees. Studying same
helps in understanding the relationship you will have
with the franchisor and could accordingly be prepared

9. Be a new or an existing franchise buyer, the key research and analysis is an
essential to identify a franchise business that is most suitable to you and as
well to determine if it is genuine. After carefully analysing all the above, if
you still feel that you ‘fit the bill’; only then, you should enter into the
contract.

10. Corporate Headquarters
#15,Sri Lakshmi Complex, 4th Floor, St. Marks Road, Bangalore - 560 001. India
Tel: 91 80 6160 4545 e-mail: franchise@iihttechnologies.com
web: www.iihttechnologies.com/