Entrepreneurs in North Carolina who are considering purchasing a business may want to consider buying a franchise. However, they must do their due diligence and thoroughly research certain sources before deciding to make a purchase.
One of the most important sources of information about a franchise company is the franchise company itself. It can provide the crucial details prospective buyers may need to make an informed decision. This information can include franchise brochures, franchise disclosure documents, testimonials from franchisees and information about the industry.
Prospective buyers should expect to undergo some degree of vetting when they contact a franchisor. It may be necessary to complete a confidential information request and learn about the company’s procedure for conducting a mutual evaluation. Questions about the prospective buyer’s preferred geographic location, capitalization and how long it will take for a decision to be made are likely to be asked.
Franchise brokers are another essential resource for potential franchise buyers. It is not unusual for a franchise broker to represent over 100 franchisors. The broker receives training to assist prospective franchisees with identifying the opportunities that they are most suited to pursue.
Generally, franchise brokers are not paid by franchisees. In exchange for the service they provide, the brokers will receive a success fee of at least $20,000 from the franchisor if their actions result in the sale of a franchise.
At franchise trade shows, prospective franchise buyers will have access to several hundred franchisors from a wide range of industries. These shows may also feature seminars that discuss the aspects of franchising.
An attorney who practices business and commercial law may protect the rights and interests of clients who are buying and selling businesses. A lawyer may assist franchise buyers by reviewing franchise contract terms. Assistance may also be provided for other types of business transactions.