Franchisor Approval Process

searcher profile

January 31, 2025

by a searcher from University of Virginia in Charlottesville, VA, USA

Does anyone know what franchisors typically request during the approval process? I'm trying to proactively put together a packet of information they might want from me, but not sure what kind of info they would be interested in beyond my qualifications, financing strategy, and deal terms.

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commentor profile
Reply by a searcher
from Rutgers in Philadelphia, PA, USA
The larger ones I have direct experience with 100% go after failed franchisees. They can and will pursue you for those contractual minimum royalties. Often times they will make a settlement offer for a reduced one-time payment, but you should not expect to be off the hook if the business fails. They will come for their pound of flesh along with the rest of the creditors.
commentor profile
Reply by an investor
from University of Virginia in Washington, DC, USA
Biggest obstacle... they will want a PG from you... if you do not fulfill the minimum requirements in their franchise agreement (even if their support and business suck) you are on the hook for those minimum royalty payments for the life of the contract. They will tell you they never go after failed franchisees, but they do have a contractual right to...
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