Use the FTC Rule Before Buying a Home Improvement Franchise
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Use the FTC Rule Before Buying a Home Improvement Franchise
According to the Federal Trade Commission (FTC), all prospective franchise buyers must receive a detailed disclosure document at least ten days in advance of actually purchasing a franchise – this includes a home improvement franchise.
The disclosure document should include the following information:
1. Names, address and telephone numbers for at least ten people who have purchased the franchise in the past and who live near you. Depending upon the franchise, location may be near or quite far but take the time to speak to these people before making a decision! Ask about their experience with the franchise but also the business in general: What do they like? What do they dislike? How did they overcome specific challenges?
2. Financial audit state. This is important, so have this reviewed carefully. What would you do if the parent franchise went bankrupt?
3. Background and history of executives and other important positions in the home office. When you purchase a home improvement franchise you are paying for the expertise and business experience of these people. Know what you are getting for your money!
4. The expected costs to start and maintain the business.
5. The expectations and responsibilities of you as a buyer of a home improvement franchise and they as the franchise seller. If you have any questions be sure to consult with a competent legal advisor who specializes in franchise contracts.
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| Joe Wallace |
