Franchising Can Be Daunting

Hartford Courant:

An April 14 article, “Franchising: Is It For You?” [Sunday Consumer], provided a balanced but superficial look at the world of franchising.

The article mentioned personality, ability to deal with the public and entrepreneurial spirit as the main factors in a potential franchisee’s suitability. The article failed, however, to indicate this is only the first preliminary step.

For many, the documents the franchiser must provide to the prospective franchisee are daunting. The franchise disclosure document consists of 23 items, including detailed background information about all aspects of the franchise system, together with charts, tables, lists, cross references, audited financial statements, financial performance representations, exhibits, state addenda and copies of all contracts.

Although the franchise disclosure document must be written in plain English, the other documents, including the financial statements and the franchise agreement, are often couched in accounting technicalities and legalese.

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