Western Cape Business Opportunities Forum

How to Franchise

Franchise is the agreement or license between two legally independent parties which gives:

  • A person or group of people (franchisee) the right to market a product or service using the trademark or trade name of another business (franchisor)
  • The franchisee the right to market a product or service

A prospective franchisee should always undertake research that includes and is not limited to:

  • Annual financial statements and/or management accounts
  • A list of stock
  • Valuation of assets to be purchased
  • Staff audit
  • Contingent liabilities of the existing concern
  • Transferring concern to a new legal entity
  • Checking customer base and suppliers with existing contracts.

Source: www.trade.gov

http://www.trade.gov/sabit/static/Introduction%20to%20Franchising-IFA-Eng_Latest_tg_sabit_005404.pdf