• Promises huge profits for little investments.
• Says "act now to get in on the ground floor".
• Fails to give statistics on sales and profits.
• Promises "easy sales".
• Fails to identify Directors or Principals.
• Attempts to "trade you up" to a higher fee.
• Says "act now, it will cost more later".
• Promises profits by sub-franchising.
• Has a similar name to a well-known business.
• Promises large income from "work from home" scheme.
• Demands large front-end licence fee.
• Has a very short-term contract.
• Provides no data on track record or financial strength.
• Cannot give plans for future development.
• Has vague territories.
• Is ignorant of competition.
• Has incomprehensible contract.
• Is vague about training and support.
• Has weak advertising.
• Is vague about your financial obligations.
• Will only meet in a hotel.
• Doesn't have professional HQ premises
• Is evasive about access to existing franchisees.

• Your rights to transfer ownership of franchise
• Obligations to the franchisor (eg buying supplies, adverts, etc)
• Rights to renew or extend the contract beyond original term
• Terms & Conditions for terminating contract
• Description of training and support on offer
• Precise price, commissions, rental fees involved
• How boundaries/territories are awarded
• Description of heir's rights in the event of your death

• Director's and key executives' business experience.
• The company's track record.
• Description of the franchise.
• Initial investment required.
• Other payments due to the franchisor.
• Data on help in raising finance.
• Restrictions on franchisee's personal participation.
• Termination/Renewal of agreement terms.
• Number of existing franchisees and their success rates.
• Franchisor's rights to select / approve sites for premises.
• Training and support guaranteed to the franchisee.
• Financial information about pilot operation.
• Financial data on the franchisor.
• List of franchisor's banker and other professional advisors.

• The Company's financial health and history.
• How long it has been franchising.
• Details of the pilot operation result.
• Current number of franchisees.
• Permission to talk to random franchisees.
• Main source of company earnings.
• Value and appeal of product and service.
• Long term viability of product / service.
• Type and level of head office support.
• Full details of the training provided.
• Whether training is an extra cost.
• Total cost of taking up the franchise.
• Realistic working capital needed.
• Permission for bank references and other referees.
• Territorial practises and exclusivity terms.
• Any need to buy products from the franchisor.
• Target obligations.
• Realistic profit and loss figures.
• Management service fees and/or royalty payments.
• Operating restrictions.
• Launch assistance.
• Sample contract.

Bear in mind that whilst the above bullet-points are a good guide to entering the world of franchising, not all of them apply to all types of franchises.

Apply the points to the type of business you are considering entering and use them to rule out which franchises are suitable and which are not. When you have narrowed down the list of businesses to a small list then make contact with each one of them and request further information.

When each Franchisor's information pack arrives, make comparisons between them all. Although there will be obvious differences between the types of operations, you will soon notice that some companies offer more information than others. Pretty soon, you'll get a feel for those companies which aren't quite telling you everything you need to know.

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