Before you sign a chai franchise agreement, here are some key areas to investigate

Track Record

Research the franchisor's history. How long have they been in business? Do they have a history of successful franchisees?

Litigation History

Are there any legal disputes or bankruptcies in the franchisor's past?

Financial Performance

Request financial statements (if possible) to understand the franchisor's financial health.

Franchise Agreement

Carefully examine the terms of the agreement.  This includes fees, territory rights, marketing requirements, training provisions, and termination clauses. Consult with a lawyer specializing in franchise law.

Initial Investment

Understand all upfront costs like franchise fee, training, equipment, and inventory.

Ongoing Fee

Be aware of royalty fees, marketing contributions, and other ongoing expenses.

Profit Potential

Review the FDD's earnings claim section (if applicable in your country) and talk to existing franchisees about their profitability. Develop a realistic financial projection for your business.

Training and Support

What training and ongoing support does the franchisor provide?  Is it sufficient to help you operate the business successfully?

Site Selection and Lease Negotiation

Does the franchisor offer assistance in finding a suitable location and negotiating a lease agreement?

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