[spex x]

excellent post by RcrdBoy. I just wanted to add that franchises can be run absentee, but only after they are established. You'll be working your first year.

I forgot about the advertising fees. Sometimes these can be 5% of gross sales. So you pay the franchisor 5% and the marketing fees 5% of gross. That is serious money, and there isn't anything you can do about it like you could if you were independent. So think about that.

RcrdBoy spoke as if the franchisor and franchisee are at odds. Well, a lot of franchisors operate that way. These guys want to sell you the franchise. This is why you want to talk with other owners - you've got to see what kind of relationship the owners feel they have with the franchisor.

Another hurtle is that the franchise contract might specify a time frame between the time you sign the contract and the time you open up shop. Franchise fees are nonrefundable if you can't open. For instance, Quizno's showed like 50% growth last year, but over half the franchises sold never actually opened that the franchisees had to forfeight their franchise fee and their rights to open a Quiznos. (I don't mean to rag on Quiznos, but I've been researching them pretty recently once I noticed that there are like 10 of them for sale in my area. It looks like all the owners are trying to bail and salvage what they can before it all falls apart.).

owning a franchise has a lot of positives if you get into the right situation. But it can really hurt you too, so be careful. Do a lot of due diligence before you sign on.