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    83kh3siyx - Franchising Red Flag

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    ARNOLD CABRAL
    This document outlines several red flags to watch out for when considering a franchise opportunity. These include: 1) an absence of an established brand or trademark; 2) an ambiguous or unregistered company; 3) franchisors that do not own company-operated branches to demonstrate the business model; 4) an inability to provide a list of existing franchisees; 5) manipulative marketing tactics rather than a focus on the business fundamentals; 6) pressure to sign agreements prematurely without review; 7) unrealistic promises of guaranteed success; and 8) a vague and undefined qualification process for applicants. Prospective franchisees are advised to avoid opportunities exhibiting these red flags.

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    83kh3siyx - Franchising Red Flag

    Uploaded by

    ARNOLD CABRAL
    33 views13 pages
    This document outlines several red flags to watch out for when considering a franchise opportunity. These include: 1) an absence of an established brand or trademark; 2) an ambiguous or unregistered company; 3) franchisors that do not own company-operated branches to demonstrate the business model; 4) an inability to provide a list of existing franchisees; 5) manipulative marketing tactics rather than a focus on the business fundamentals; 6) pressure to sign agreements prematurely without review; 7) unrealistic promises of guaranteed success; and 8) a vague and undefined qualification process for applicants. Prospective franchisees are advised to avoid opportunities exhibiting these red flags.

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    83kh3siyx_Franchising Red Flag

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    This document outlines several red flags to watch out for when considering a franchise opportunity. These include: 1) an absence of an established brand or trademark; 2) an ambiguous or unregistered company; 3) franchisors that do not own company-operated branches to demonstrate the business model; 4) an inability to provide a list of existing franchisees; 5) manipulative marketing tactics rather than a focus on the business fundamentals; 6) pressure to sign agreements prematurely without review; 7) unrealistic promises of guaranteed success; and 8) a vague and undefined qualification process for applicants. Prospective franchisees are advised to avoid opportunities exhibiting these red flags.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    33 views13 pages

    83kh3siyx - Franchising Red Flag

    Uploaded by

    ARNOLD CABRAL
    This document outlines several red flags to watch out for when considering a franchise opportunity. These include: 1) an absence of an established brand or trademark; 2) an ambiguous or unregistered company; 3) franchisors that do not own company-operated branches to demonstrate the business model; 4) an inability to provide a list of existing franchisees; 5) manipulative marketing tactics rather than a focus on the business fundamentals; 6) pressure to sign agreements prematurely without review; 7) unrealistic promises of guaranteed success; and 8) a vague and undefined qualification process for applicants. Prospective franchisees are advised to avoid opportunities exhibiting these red flags.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 13

    FRANCHISING

    RED FLAGS
    PRESENTED BY: PROF. JOHN ALFRED A.
    MENDIVEL,MBA
    THESE SCENARIOS VIOLATE SOME OF
    THE BASIC PRINCIPLES OF
    FRANCHISING, ADHERENCE TO
    WHICH SPELLS SUCCESS.
    • Absence of a brand or
    trademark
    Franchise fees are paid for using the
    trademark that has been used in the
    market for at least one year. The longer
    it has been used, the better. Be wary of
    a franchise offering where the
    trademark had recently been used or
    not used at all.
    • Ambiguous Company
    Franchise applicants should ascertain that
    franchise companies are registered and
    legitimate. Legitimacy implies that their
    trademarks are registered with the
    intellectual property office and that
    companies are certified by the securities and
    exchange commission and the department of
    trade and industry.
    Avoid companies offering franchises that do
    not introduce one to the franchisor and do
    not give one the opportunity to visit the
    franchisors office.
    • Franchisors without company – owned
    branches
    Franchising occurs when a proven business
    system can be used. This system is developed in
    company-owned branches. It’s important to check
    if the franchisor owns branches. The ability to
    require compliance with procedures is greater
    when the franchisor has his own branches that
    implement them.
    • Inability to show list of
    franchisees.
    Responsible franchisors are open to the
    applicants talking to their franchisees during
    the application process. When franchisor
    does not give the list of franchisees, one can
    deduce that the franchisor wants something
    to remain hidden from the applicants.
    • Manipulative marketing gimmicks
    Responsible franchisors veer away from hard
    sell and manipulative marketing gimmicks. Be
    wary of marketing gimmicks such as buy one
    take one, promotional franchise fees, lifetime
    rights, absolutely no royalties, and 10, 000
    peso franchise investments.
    These are marketing come – ons designed to
    simply sell.
    • Signing of franchise agreement
    Signing the franchise agreement comes at the
    later part of the qualification process. One must
    avoid companies that will make signing the
    agreement and paying fees their first agenda.
    It’s also crucial that franchise applicants be
    given the opportunity to read and understand
    the franchise agreement. It would be grossly
    unfair of applicants are not given a copy and the
    chance to study the franchise agreement before
    signing it.
    • Unrealistic promises
    Listen carefully to the way the franchise
    offering is presented. Some will make
    promises that border on fantasy like 100
    percent guaranteed success or that
    guarantee payback to franchisees in two or
    three months.
    • Vague qualification process
    Franchise system explain clearly to
    franchise applicants their qualification
    process. Doing so facilities their
    understanding and acceptance of the
    process and manages their expectations.

    When the process is not explained,


    applicants risk changes at the whim of the
    franchisor, which at times become
    unreasonable and unrealistic.

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