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Nick,
The franchisor I am looking at has an international company
outside of the US as the "parent" company and
a US corporation to handle the US side of the franchise
business. The US franchisor corporation has a very poor
balance sheet. When questioned about this the company
replied that the "parent" company was in very
good shape but that they could not disclose financial
data from the international corporation. I'm concerned.
Should I be?
Andrew
Hi Andrew,
In order to franchise in the U.S.
, it is necessary to form a corporation here and therefore,
a shield is naturally provided. However, here are my thoughts.
One, I probably would not be too concerned about the financial
picture of the partner so long as other (U.S.) franchisees
are having a positive experience. Two, if there are no
other local franchisees to talk to, then I would ask for
contacts info on franchisees in other countries. If that
is not possible, then I would ask again for financials,
but of even greater importance to me would be proof that
there "program" works somewhere. It's all a
matter of track record. Make sense?
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