The franchise business will contact you by means of email and/ or telephone only to the email address and phone number you have provided.
By submitting the enquiry form you are consenting to send your personal information to the selected franchise business.
You also agree to receive further newsletter email marketing from What Franchise.
Close
What type of due diligence should a prospective franchisee complete before investing?
Shelley Nadler writes:
The prospective franchisee should first assess its prospective franchisor. Franchise systems will be at different stages of development and the more franchisees there are the easier your task will be, as there will be many franchisees who you can talk to about what the franchise and franchisor have done for them.
Where the franchisor is just getting off the ground, greater care is needed in making a choice and you’ll want to check if the pilot testing has been wide enough and in sufficient representative locations over a sufficiently long period.
On the financial side, you should ask for a copy of its latest audited accounts and for a reference from its bankers. You should speak to existing franchisees - the franchisor should allow you to choose which ones to speak to. You should carry out a company search at Companies House to check the information you have been provided with.
You will also need to assess the business proposition of the franchisor, including initial and ongoing support and training provided, details of how the business is structured and operational details.
The prospective franchisee will want to find out the investment cost of a franchise, initial and ongoing fees and working capital requirements, plus figures for profit margins and expenses based on actual franchise businesses in the network. You should take advice from your accountant on any financial information you’re provided with.
Shelley Nadler is a legal director in Bird & Bird’s international franchising team and has many years’ experience of advising on all aspects of franchising.
You might also be interested in

Answered by Louise Harris
Louise Harris writes: This question is one that many have explored and much has been written on... read more

Answered by John Pratt
John Pratt writes: Virtually all franchise agreements are granted for a specific term and either contain an... read more

Answered by Shelley Nadler
Shelley Nadler writes: The answer to this will really depend on the reason your franchise is not... read more

Answered by Alan Wilkinson
Alan Wilkinson writes: There are three main types of franchise. An owner-operator will work in the business... read more
Exciting Franchise Opportunities

Start your own School of Rock franchise
Yes
Find Out MoreN/A

Request Free Information
Send a free enquiry to School of Rock for further information!

Start your own Homecare by Kare Plus franchise
Yes
Find Out MoreN/A

Request Free Information
Send a free enquiry to Homecare by Kare Plus for further information!

Start your own Auntie Anne’s franchise
Yes
Find Out MorePersonal ROI to be within 24

Request Free Information
Send a free enquiry to Auntie Anne’s for further information!

Start your own easyStorage franchise
Yes
Find Out MoreNet profits rising from 7% to 40% on...

Request Free Information
Send a free enquiry to easyStorage for further information!

Start your own Coffee-Bike franchise
Yes
Find Out MoreFixed sites can earn up to £16,000 per...

Request Free Information
Send a free enquiry to Coffee-Bike for further information!
Companies to Consider

Get expert franchising news delivered straight to your inbox
Franchise news, advice and new opportunities delivered weekly.
Must Read Articles
-
Brexit property investment myths BUSTED!
Added 3 years ago | 2 min read
-
Franchisees, ace staff recruitment with these top franchisor-recommended strategies
Added 2 days ago | 2 min read
-
The ultimate guide to low-cost franchises
Added 3 days ago | 2 min read
Franchises by Minimum Investment
Find your next business opportunity
Search 100s of UK franchises and become your own boss today.
-
Under 10k
Starting a franchise doesn't have to be costly
Click here -
Under 20k
A mid-range investment for the more experienced
Click here -
Over 50k
If budget is not an issue, then don't miss these.
Click here -
Local Franchises
Find the perfect franchise in a location to suit you
Click here
What Franchise Newsletter
Keep up to date with all the industry news