Name Recognition: A primary reason for purchasing a franchise is right to associate with company's name. The more widely recognized name, more likely it will draw customers who know its products or services:

Training and Support: Another reason for purchasing a franchise is to obtain support from franchisor. What training and ongoing support does franchisor provide?

Franchisor's Experience: Many franchisors operate well-established companies with years of experience both in selling goods or services and in managing a franchise system. Carefully consider how long franchisor has managed a franchise system.

Growth: A growing franchise system increases franchisor's name recognition and may enable you to attract customers. Make sure franchisor has sufficient financial assets and staff to support franchisees.

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Advertising fees: You may have to pay into an advertising fund. Some portion of advertising fees may go for national advertising or to attract new franchise owners, but not necessarily to target your particular outlet.

Controls: To ensure uniformity, franchisors typically control how franchisees conduct business. These controls may significantly restrict your ability to exercise your own business judgment.

Terminations and Renewal: You can lose right to your franchise if you breach franchise contract. In addition, franchise contract is for a limited time; there is no guarantee that you will be able to renew it. A franchisor can end your franchise agreement if, for example, you fail to pay royalties or abide by performance standards and sales restrictions. If your franchise is terminated, you may lose your investment. Franchise agreements typically run for 15 to 20 years. After that time, franchisor may decline to renew your contract.

Before investing in a particular franchise system, carefully consider how much money you have to invest, your abilities, and your goals.

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