INFORMATION YOU SHOULD KNOW BEFORE BUYING A FRANCHISE

NAME & ADDRESS OF FRANCHISOR: ______________________________

NAME OF FRANCHISOR: __________________________________________________________________

CORPORATE ADDRESS: ____________________________________________________________

CITY: ______________________________ STATE: _____ ZIP: ________

PHONE: ______________________ FAX: ___________________

WEB PAGE: __________________________________

E-MAIL: _______________________________

OFFICERS & KEY MANAGEMENT:

PRESIDENT: ___________________________

FRANCHISOR DIRECTOR: ______________________

TEXAS CONTACT: _______________________

OTHER: _____________________________________

LEGAL COUNSEL: _______________________

ACCOUNTING FIRM: ___________________________

Number of corporate employees? __________________________________________________________

When was the franchisor established? ______________________________________________________

When did the franchisor begin offering franchises? ____________________________________________

PRODUCTS & SERVICES OFFERED BY FRANCHISEES TO
CUSTOMERS/CLIENTS:

(Describe the company's products and services)

MARKET AREA AND TYPE OF CUSTOMERS/CLIENTS SERVED:

WHAT IS THE CRITERIA FOR ESTABLISHING THE MARKET AREA
FOR EACH FRANCHISEE?

WHO ARE THE CUSTOMERS/CLIENTS?

RETAIL: ___ COMMERCIAL: ___ GOVERNMENT: ___
OTHER: __________________________

HOW DO THE FRANCHISEES GET THEIR SALES LEADS?

(Cold calls, newspaper advertising, in store advertising, direct mail, coupons, direct mail, telemarketing, franchisor)

DOES THE FRANCHISOR PROVIDE SALES LEADS?

WHAT PERCENT OF THE SALES LEADS ARE FURNISHED BY THE FRANCHISOR?

ARE THERE ANY KNOWN PERSONALITIES PROMOTING THE COMPANY?

WHAT ADVERTISING SUPPORT DOES THE FRANCHISOR PROVIDE FOR ITS FRANCHISEES?

(television, radio, outdoor advertising, newspaper advertising, magazine advertising, direct mail)

IS THERE A CO-OP ADVERTISING PROGRAM?

IS THERE A GRAND OPENING PACKAGE?

WHAT ARE THE TYPICAL DAYS AND HOURS OF BUSINESS OPERATION?

WHO ARE THE MAJOR COMPETITORS?

MAJOR SUPPLIERS:

LIST MAJOR SUPPLIERS (Note any exclusive lines and/or franchisor controlled pricing):

WHAT PRODUCTS DOES THE FRANCHISOR PROVIDE?

WHAT PRODUCTS CAN THE FRANCHISEE BUY LOCALLY?

NUMBER OF FRANCHISOR AND FRANCHISEE OWNED FRANCHISES:

TOTAL NUMBER OF EXISTING FRANCHISEES? ________________________

NUMBER OF UNITS OWNED BY FRANCHISOR? ________________________

NUMBER OF INTERNATIONAL FRANCHISEES? ________________________

NUMBER OF EXISTING FRANCHISEES IN TEXAS? ________________________

NUMBER OF PENDING FRANCHISEES IN TEXAS? ________________________

NUMBER OF FRANCHISEES IN THE HOUSTON AREA? ________________________

NUMBER OF PENDING FRANCHISEES IN THE HOUSTON AREA? ________________________

HOW MANY FRANCHISEES ARE PLANNED FOR THE HOUSTON AREA?

OBTAIN A LIST OF TEXAS FRANCHISEES SHOWING NAME, ADDRESS AND PHONE NUMBER:

HOW MANY FRANCHISEES HAVE FAILED IN THE LAST TWO YEARS? _____________________

WHEN DID THE FRANCHISOR FILE DISCLOSURE DOCUMENTS IN THE STATE OF TEXAS?

FACILITIES AND EQUIPMENT REQUIRED FOR FRANCHISE OPERATION:

TYPE OF FACILITY REQUIRED:

__ Mall Shopping Center __ Neighborhood Shopping Center __ Strip Center

__ Office Building __ Business Park __ Home

TYPICAL SIZE OF FACILITIES NEEDED?

DOES THE FRANCHISOR PROVIDE BUILDING OR FACILITIES DESIGN PLANS?

WHAT ASSISTANCE DOES THE FRANCHISOR PROVIDE TO THE FRANCHISEE IN FINDING A LOCATION TO OPERATE THE FRANCHISE BUSINESS?

WHAT FURNITURE & EQUIPMENT IS REQUIRED TO OPERATE THE FRANCHISE?

(Attach List of typical items)

DOES THE FRANCHISOR PROVIDE ANY OF THE REQUIRED EQUIPMENT TO OPERATE THE BUSINESS?

STAFFING and TRAINING:

STAFFING:
IS THE FRANCHISEE REQUIRED TO BE AN ACTIVE MANGER OF THE FRANCHISE?

WHAT IS THE TOTAL NUMBER OF PEOPLE NEEDED TO OPERATE A TYPICAL FRANCHISE?

(List typical job categories)

TRAINING:

HOW LONG IS THE INITIAL TRAINING OF THE FRANCHISEE?

WHERE IS THE TRAINING CONDUCTED?

TRAINING COSTS INCLUDED IN THE FRANCHISE FEE: YES ___ NO ___

INSTRUCTION & MATERIALS ______

TRANSPORTATION ______

ROOM & MEALS ______

WHAT DOES THE TRAINING INCLUDE:

FRANCHISE OPERATIONS ______

SALES TRAINING ______

PERSONNEL TRAINING ______

MANAGEMENT TRAINING ______

DESCRIBE THE CONTINUING TRAINING PROGRAM:

FRANCHISOR FIELD SUPPORT:

IS THERE A FIELD SUPPORT PERSON ASSIGNED TO EACH FRANCHISEE?

HOW MANY FRANCHISEES DOES A FIELD SUPPORT PERSON
TYPICALLY HANDLE?

HOW FREQUENTLY DOES THE FIELD SUPPORT PERSON
VISIT THE FRANCHISEE?

DOES THE FRANCHISOR ASSIST EXISTING FRANCHISEE IN
THE SALE OF THEIR FRANCHISES?

FRANCHISE AGREEMENT AND COSTS:

WHAT IS THE TERM OF THE FRANCHISE AGREEMENT?

WHAT IS THE RENEWAL TERM OF THE FRANCHISE AGREEMENT?

WHAT IS THE CURRENT FRANCHISE FEE FOR A SINGLE UNIT?

WHAT IS THE FRANCHISE FEE FOR THE RENEWAL OF AN
EXISTING FRANCHISE AGREEMENT?

WHAT IS THE CURRENT FRANCHISE FEE FOR A MULTIUNIT FRANCHISE?

WHAT IS THE CURRENT DEVELOPMENT FEE FOR A MULTIUNIT FRANCHISE?

WHAT IS THE CURRENT ROYALTY FEE?

WHAT IS THE CURRENT ADVERTISING FEE?

HOW MUCH IS THE EQUIPMENT PACKAGE FOR A NEW FRANCHISE?

HOW MUCH IS THE INVENTORY COSTS FOR A NEW FRANCHISE?

DOES THE FRANCHISOR HAVE THE FIRST RIGHT OF REFUSAL
TO PURCHASE AN EXISTING FRANCHISEE?

WILL FRANCHISOR ALLOW THE TRANSFER OF AN EXISTING FRANCHISE AGREEMENT OR IS A NEW AGREEMENT REQUIRED?

HOW MUCH IS THE FRANCHISE TRANSFER FEE UPON A SALE OF
AN EXISTING FRANCHISE?

WILL THE FRANCHISOR FINANCE ANY PART OF THE FRANCHISE
COSTS TO OPEN A NEW FRANCHISE?

HAS THE FRANCHISOR ARRANGED ANY SPECIAL FINANCING PACKAGE
FOR FRANCHISEES WITH FINANCIAL LENDERS?

DOES THE FRANCHISOR PROVIDE PROSPECTIVE FRANCHISEES WITH AN EARNINGS CLAIM?

DOES THE FRANCHISOR BELONG TO THE INTERNATIONAL FRANCHISE ASSOCIATION?

FRANCHISE AND MARKETING MATERIALS:

OBTAIN OR REVIEW THE FOLLOWING DOCUMENTS AVAILABLE?

FRANCHISE MARKETING PACKAGE INCLUDING BROCHURES:

FRANCHISE AGREEMENT:

DISCLOSURE DOCUMENT

NEWSPAPER ADVERTISING

ARTICLES ABOUT THE FRANCHISOR AND/OR FRANCHISEES

VIDEO TAPE

LETTER FROM STATE SHOWING PROOF OF TEXAS FILING

LIST OF FRANCHISEES

PROSPECT RESUME/APPLICATION FORM

ARTICLES ON GROWTH OF THE INDUSTRY

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