Important questions to ask before buying a franchise (and before selling one)

A close friend invested in what appeared to be an awesome franchise idea about 10 years ago. It was a restaurant that took advantage of the great notoriety its founder earned by being featured in a very popular TV show in the 90s.

The problem my friend encountered is one that is a little too common among franchises: The franchisor assumed that if the franchisees did exactly what he did, they would all be successful. That is often not the case. 

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In this case, the original location took advantage of exceptional quality and word of mouth around its neighborhood in Manhattan. What works in a densely populated city doesn’t necessarily work in the New Jersey suburbs, though, and without any marketing support, my friend’s restaurant eventually went bankrupt.

Franchising is an awesome concept...

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