Get the most out of your affiliation

Get the most out of membership

Get the most out of membership

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Get the most out of membership

Step 5:
Analysis of legal documentation and numbers.


Have you identified interesting formats that fit your personality and your pocket? If you are at this point in the journey now you need to contact the franchisors who have most convinced you and ask for documentation to better understand business model, as well as of course to visit unannounced more than one active outlet and get a more concrete idea. Among the documents you need to obtain:
1. the projected business plan in particular I need to be clear about some numbers.

  1. the break event point of the activity;
  2. the payback period of the investment;
  3. first margin and operating margin;
  4. the profitability of the business model on invested capital;
  5. all assumptions underlying the previsonal.

2. a draft franchise contract;
3. and finally, ask if they have drafted an operations manual.
In addition, there are another set of questions to help guide you: in how many and which cities has the model been tested? What are the average store turnover numbers? Are there ongoing disputes with other franchisees? If, on the other hand, there is only the pilot store then your bargaining power will definitely be stronger but even more careful will have to be the process of evaluating the format.

Step 6:
What about the collaborators?


Before signing you need to ask yourself some questions: have I formed my team? Do I have the people needed to carry out my business? Is the number of staff consistent with the business plan? Even if you have the necessary number of people available, initially include one extra person, because you know not all your staff after the start-up phase will stay on board; and among chosen people there will be surprises that you will not like, so you will be forced to send them away. Actively participate in all selection interviews and, even at this stage, if you are not supported by the franchisor rely on a franchise consultant:I would have someone to recommend you.

Step 7:
Negotiate and define an exit.


Once you have gathered all the materials, get help from an expert. A franchise consultant can be of great support to you in an analysis of the economic and legal aspects of the franchisor and assess the reliability of the numbers and go deeper, unearth the pitfalls in the contracts and delve into how good the franchisor’s operating model is. Also, it can somehow get you to wrest better payment terms and an ad hoc exit clause in case unfortunately the investment does not go as expected. So, if you are considering a ‘franchise brand affiliation, get assistance from specialists preferably from us.

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If you want to know more about how to create your own format from scratch or develop your franchise network, set up a free consultation.

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