1. VIETNAM FRANCHISE DEVELOPMENT SOLUTION

2. FRANCHISING,
ESSENTIAL MATTERS WHEN BUYING A FRANCHISE

3. 1. EVALUATE YOURSELF
2. SELECT BRAND
3. FRANCHISE AGREEMENT NEGOTIATION
CONTENT

4. EVALUTAE YOURSELF
Franchise is the great way to start your own business be your own boss,
you don’t just have a job but have a future. Here are something you should consider
before you plunge into a franchise business

5. 1. Consider what is your objective and
how the franchise help you to achieve
your goals. There are 3 types of
franchise ownership: Active
ownership, Passive ownership, Semi-
active ownership
EVALUTAE YOURSELF

6. 2. Consider time commitment you
have to make to the franchise. Note
that sometime the franchisor may
have a certain business hour time
requirement
EVALUTAE YOURSELF

7. 3. Consider how long your business
can be profitable. Your goal is to
achieve your financial independence.
Most of the time, the franchise will be
able to start immediately. However
revenue and profitable are two
difference things
EVALUATE YOURSELF

8. 4. Consider what are your territories.
If you become successful, you may
want to expand your business.
However it will be too late at the time
when you realize the territory
limitations
EVALUATE YOURSELF

9. SELECT YOUR BRAND
1. Your first step should be to determine what industry your franchise will be
in
2. Your knowledge of a particular industry will give you valuable insight into
how to run your franchise and maximize profit
3. In contrast, some entrepreneurs choose to buy franchises in industries
they have no experience in, often because they have a passion for a
particular market.
4. If you are having trouble finding a franchise that is a good match for your
skill set and interests, take a step back. Are you sure franchising is right
for you?

10. Area Franchise Agreement (AFA)
discussion should be a very defense
negotiation. There are a lot threaten
in AFA which you must recognize and
avoid and protect your future. You
must be vigilant about knowing and
fulfilling your own duties
NEGOTIATE FRANCHISE AGREEMENT

11. “Most of franchisor say that : Initial
franchise fee, royalty fee, minimum
royalty are un-negotiable – BUT YOU
CAN NEGOTIATE ”
1. Initial Franchise fee, royalty fee, minimum royalty
NEGOTIATE FRANCHISE AGREEMENT

12. Read the company's disclosure document. This document
should tell you business background, litigation history,
bankruptcy history, costs, restrictions, grounds for
termination of the agreement, training and support
information, advertising information, earnings potential,
financial history, and current and former franchise
information. Make sure you read the entire document and
that you understand it. Give a copy to your attorney as
well
2. Disclosure document
NEGOTIATE FRANCHISE AGREEMENT

13. be sure that the duration of the Franchise Agreement is
clearly stipulated. How long does it last – five, ten, or
twenty years? Is it renewable when the initial contract
expires? If the contract is renewable, how much will you
have to pay? Is it a nominal fee or the full franchise fee?
3. Duration of the agreement
NEGOTIATE FRANCHISE AGREEMENT

14. How much control does the franchisor exert over selling
or transferring your individual franchise business? Doe
the franchisor have approval/veto rights over prospective
buyers? What percentage of the sale is the franchisor
entitled to, and when must it be paid? Basically, this
aspect of the contract dictates how, when and under what
conditions you can sell the business. It is always wise to
have a good exit plan before investing in anything, so
know what your rights and obligations are in regard to
selling the franchise business.
4. Selling or Transferring your franchise
NEGOTIATE FRANCHISE AGREEMENT

15. How much control does the franchisor exert over selling
or transferring your individual franchise business? Doe
the franchisor have approval/veto rights over prospective
buyers? What percentage of the sale is the franchisor
entitled to, and when must it be paid? Basically, this
aspect of the contract dictates how, when and under what
conditions you can sell the business. It is always wise to
have a good exit plan before investing in anything, so
know what your rights and obligations are in regard to
selling the franchise business.
5. Termination of the agreement
NEGOTIATE FRANCHISE AGREEMENT

16. You want your advisers to work with you to help you find
potential errors, omission. Their greatest value is that they
do not have the same vested interested that you have.
They are not buying the business themselves but helping
you to buy a business . By working with them you get an
independent third-party perspective. They have no
emotional ties in the transaction and are free to speak
from an unemotional perspective.
6. Advisers provide perspective
NEGOTIATE FRANCHISE AGREEMENT

17. THANK YOU