When Evaluating Franchises, Do Documents Deliver?

Sound planning is essential when opening a franchise, so if you’re investigating opportunities, be sure to ask for critical documents, including:

  • The Franchise Manual: This manual should contain everything owners and operators need to know in order to successfully open and run their franchise. In addition to outlining standard day-to-day procedures, it should also address customer service, financials, and HR topics.
  • Disclosure Document: Intended to share the information potential investors need to make a decision, this document, mandated by the FTC, must include details on the company’s ownership, any litigation, the estimated initial investment and other fees, territory, and more.
  • Financial Statements: While availability may be limited for recently-launched franchise businesses, these audited statements – required as part of the disclosure document – should include a balance sheet plus statements of operations, stockholders’ equity, and cash flow.

These documents are essential to avoid pitfalls so do your due diligence and check them over carefully before you sign a contract or turn over a fee.

Please contact us at 702-751-7943 or lee@zabas.com to learn more about our Mexican franchise.

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