COST OF THE FRANCHISE
How much is the initial franchise fee? _____________
Refundable ___ Nonrefundable _____
What does the initial fee purchase? _________________________________
Is a lump-sum payment required? Yes ___ No ___
Are installment payments allowed? Yes ___ No ___ How many? ___________
Payment due dates ________________________________________________
Is franchisor financing available? Yes ___ No ___ Interest rate _____________
Are periodic royalty payments required? Yes ___ No ___
How often? _____________________________________________________
How are they calculated? _________________________________________
Does the franchisor provide accounting services? Yes ___ No ___
For an additional fee? Yes ___ No ___ How much? _________
How are advertising costs divided between the franchisor and franchisee? ____________________________________
Is advertising national, regional, or local? _______________________________
What other services does the franchisor provide? ________________________
How is the franchise premises obtained? Purchase ___ Lease ___
Is financing available from the franchisor for the purchase of the premises?
Yes ___ No ___
Interest rate _________
How much of a down payment is required? _____________
How much are the rent payments? _____________ Due on _______________
FRANCHISE LOCATION
What geographic area is encompassed by the franchise? ______________________________________________
How far away is the nearest existing franchisee of the same franchisor? ______________________________________________
Are other franchises planned for the same geographic area in the future?
Yes ___ No ___
If so, provide details _____________________________________
Who selects the site for the franchise? Franchisor ___ Franchisee ___
Can the franchisee use his or her own property for the franchise? Yes ___
No ___
If the franchise premises require new construction, who determines the plans and specifications for the building? Franchisor ___ Franchisee ___
Who supervises construction and works with the contractor and subcontractors? Franchisor ___ Franchisee ___
What are the specifications for and restrictions on the appearance and configuration of the premises? ______________________________________
Who provides property insurance on the premises? Franchisor ___ Franchisee ___________________________________________
What are the franchisee's responsibilities relating to remodeling? _________________________________________________
What restrictions does the franchisor place on remodeling? ________________________________________________
OPERATING TERMS
Must all equipment and supplies be purchased from the franchisor? Yes ___
No ___
If not, must purchases be approved by the franchisor? Yes ___ No ___
How much control does the franchisor maintain over day-to-day operations? ________________________________________________
What aspects of the business are left to the discretion of the franchisee? __________________________________________
Are hours and days of operation dictated by the franchisor? Yes ___ No ___
Are products and services strictly controlled by the franchisor? Yes ___ No ___
Must the franchisee remain personally involved in running the franchise, or can the management duties be delegated? _______________________________
ADDITIONAL CONSIDERATIONS
Does the franchisor provide initial training? Yes ___ No ___
Does the franchisor provide on-going training? Yes ___ No ___
Under what conditions may the franchisor terminate the franchise? __________
What are the franchisor's duties and obligations to the franchisee in the event of such termination? __________________________________________________
Under what conditions must the franchise be renewed? ____________________
What happens to the franchisee's interest if he or she dies? ________________
Is the franchise assignable? Yes ___ No ___
How long has the franchisor been in business? ___ years
How many total franchises are there? ________
Are these franchises financially successful? Yes ___ No ___
How long did it take them to become profitable? _______________
Has the franchisor complied with all applicable state and federal laws and regulations? Yes ___ No ___
Other questions to ask my attorney: __________________________________
