Get The Full Facts When Buying A Franchise

Stuff.co.nz:

Selling a franchise is easy. People love the idea of owning their own business and purchasing a franchise is the packaged, low-risk, route to this goal.

A good franchise is a win-win situation. The franchisor (parent company) gets to expand its business rapidly and the franchisee (the franchise buyer) gains access to a proven brand with proven systems.

Unfortunately the market contains ‘pseudo’ franchises – businesses that call themselves franchises but are not really franchises.

Unlike Australia, New Zealand has no franchise legislation defining what constitutes a franchise and what must be provided by the franchisor to a franchisee.

A franchisee could end up investing in a business that has no real systems, inadequate training, a poor product or service. They would be taking a bigger risk than starting up their own enterprise from scratch.

As a buyer, how can you avoid a pseudo-franchise? And as a business looking to franchise, how can you create a genuine franchise? Read on…