The decision to venture into a new franchise must be carefully thought through and analyzed. Evaluating a franchise not only helps in measuring if the claims of a franchisor are legitimate but also helps in understanding the business better.

2. This is a common phase, any franchisee (buyer) goes through
during the initial days of decision making and it is also an
essential phase. The decision to venture into a new franchise
must be carefully thought through and analyzed. Evaluating a
franchise not only helps in measuring if the claims of a
franchisor are legitimate but also helps in understanding the
business better.
This article helps aspiring franchisees by providing them a tool
that will aid in evaluating a franchise business.

3. Is the Franchise new or have existed for some
time?
If it is an existing franchise, sales reports, annual
reports and other financial reports could provide
information on performance, growth and trends of
the business.
Are there obvious Competitors?
Competitors refer to the franchises of the same
business, for which exclusive and non exclusive
territory rights of individual locations and site
selection needs to be analyzed. This information
must be available in the Franchise Disclosure
Document.
1
2

4. 3
4
Who is responsible for Advertising?
If the franchisor is taking complete advertising
responsibility or not, as some franchisors will
advertise at nation, state and county wide and not
the location specifically. However it is important
that franchisor does take responsibility for any size
of the region where there is more than one
franchise.
On what basis are the products priced?
In case of products being manufactured or
supplied by an external source then pricing
strategy needs to be carefully analyzed.

5. 5
6
Is product patented and will it be shared with
you?
It is important to ensure that the trademark and
all the other intellectual property unique and are
patented. It is important to ensure that there are
no pending approvals for patent rights or chances
of cancellation of same.
What is the market trend and potential growth?
To analyse if the product has seasonal trend, life of
the product and the demand analysis is important.

6. 7
8
How is Franchisor relationship ties with
Suppliers?
Dependence on suppliers, past history of supply
ties, supplier’s ability to surpass franchisor in
producing similar product have to be learnt.
What is the reputation of the product and
service?
If the product and service has established
favourable reputation, investing in such
business may reduce venture risk much further.

7. 9
10
What is the suitability of the business in local
market if the Franchise has entered same afresh
from another country after being successful
there?
Ensure that a product test has been conducted
scientifically to assess the needs in local market.
What and how of the relationship between
Franchisor and existing Franchisees?
Franchisor is required to provide references for an
evaluation by existing franchisees. Personal inquiry
in understanding the relationship between the
parties is essential.

8. 11
12
Does the Franchisor comply with Franchising
Code of Conduct and the registration laws as
applicable?
Analysing if franchisor has met all compliances -
has to be part of the evaluation process. And to
check if all the licensing and registration has been
done is the franchisee’s responsibility.
Is there access to third party evaluation?
Find out if a franchisor would allow third
parties like franchising consultant/lawyer to
evaluate their business.

9. Indian Institute of Hardware and Technology (IIHT) believes in
total transparency in business and encourages its prospective
franchise business partners in exploring IIHT Technologies as a
business. It further invites prospective partners to visit India
for personally observing and evaluating the business. For
more information on IIHT Technologies please visit
www.iihttechnologies.com.

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: http://www.iihttechnologies.com/