The Franchise 500 list is the most well-known and commonly cited of the
various franchise rankings, but some confusion surrounds the methodology
behind Entrepreneur's ratings. Through a series of articles on
FranchiseHelp.com, we'll take a closer look at what goes into compiling these
rankings (those from Entrepreneur and those from other sources) and what a
prospective franchise buyer can glean from them when trying to make an
informed decision about joining a particular franchise system.
These excuses are usually first heard when I meet with a franchise owner who
is now asking for advice regarding their dissatisfaction with their franchise
relationship. Too late. That is, sometimes it is too late to help them.
In Item 17 of the FDD, franchisors are required to provide summaries and
cross-references for 23 key provisions in the franchise agreement. A careful
franchise prospect will have the entire franchise agreement reviewed in-depth
by an experienced franchise attorney, but the Item 17 disclosures can provide
a quick guide to use in a preliminary analysis of the franchise opportunity.
The key disclosure in Item 15 states whether the franchise owner is obligated
to participate in the direct operations of the franchised business. For
prospective franchisees looking for a pure investment rather than a business
opportunity, this disclosure might be the first (and only) provision they read
in the FDD. Although, an experienced franchise investor may be able to
negotiate an exception with the franchisor.
It's no secret that professional athletes make boatloads of money both on the
field and through lucrative endorsement deals, but what many fans don't
realize is that these big-money stars often blow all their cash in
spectacularly bad business ventures.