Assuming that the prospective franchisee accepts the greater risk of purchasing a franchise in a newer system, in order to gain the advantages, then what can be done to make the investment a little safer? While it is an accepted fact of life that franchise agreements of mature franchisors are non-negotiable, this is not necessarily the case with the new franchisors. In fact, there are important changes that should be made to the franchise agreement, for the very purpose of reducing the risks. New franchisors, anxious to start growing the system and wise enough to know that quality franchisees are necessary all the time, but especially at the beginning, will be amenable to changes to the franchise documentation that will not be tolerated later in the franchise growth cycle. Control of the location by the franchisee, reduction or elimination of the franchisor’s discretionary powers, freedom to purchase inventories and supplies anywhere, more limited post-termination obligations of the franchisee, are but a few of the areas of possible and valuable change.
While purchasing a franchise in the “best” system may be a worthy objective, what is “best” for one franchisee, may not be “best” for another. The wise approach is take stalk of yourself first, assess your tolerance for risk, determine what industries you find most fitting, then investigate, investigate and investigate more.