When you consider buying a franchise, what exactly are you buying and for how long? Are you building equity in a business you own and then can sell or are there restrictions?
Franchise agreements are wildly different in the terms they offer and what type of relationship they are seeking to sell you! Daley (2015) reminds us “Franchising is a contractual relationship for a period of time” (para 13). What considerations does that statement give rise to? What happens at the end of the initial term? What if the franchisor doesn’t want to renew your agreement? Do you have the right to expect your successfully business to extend beyond the original agreement term? Let’s call this an issue of equity protection.
Project 2
Find a new franchise agreement and investigate some key elements and provide your buy/not buy justification. This discussion gives you a chance to apply much of the knowledge you have been gaining in your program to analyze a business model!