Over the past several years, a number of hard lessons have been learned in the franchise sector. As a result, the growing trend has moved towards sophisticated approaches to franchise development and the selection of franchisees. Some still believe that they cannot afford these steps. However, the costs and losses that result from choosing the wrong candidate far exceed the cost of implementing enhanced screening and decision-making processes.
Does your selection process give you details on prospective franchisee’s assets, liabilities and derogatory information?
Here's a checklist to review.
✔️ Confirmation of Assets including bank account balances, investments, business interests and ownership in real property
✔️ Confirmation of Liabilities including credit card balances, mortgages, term loans, lines of credit and leases
✔️ Confirmation of Personal Background Details • Validation of Banking Relationships and respective account balances
✔️ Disclosure of Derogatory Credit Information including delinquent payments, NSFs. collection claims, legal actions, judgments, and bankruptcies/ consumer proposals
✔️ Disclosure of Criminal Activity or Negative Media Exposure
✔️ Verification of Current Employment and Income • Confirmation of Education Credentials
✔️ Verification of Professional Accreditation Status
✔️ Identification of False Information provided on franchise application
The amount of information available to the Franchisor will minimize Franchisee failure and turnover and increase success and profitability. Disclosure of derogatory credit information, late payments, NSFs, collection claims, legal actions, legal judgments, and bankruptcies, will help you evaluate an applicant's risk. In addition to financial information, we can help you evaluate other attributes such as employment, education credentials and professional accreditations.
Enhance your due diligence with a Prospective Franchisee Report.
Tags: Franchising
