Franchising has more appeal than a normal business venture. But the onset of a franchise is the most crucial stage of the industry. Let us discuss on the use of templates for the requirements in a franchise such as FDD, franchise agreement, and franchise operation manuals.

Before you begin with your venture, it is a wise idea to hire the services of a franchise expert in order to find out if your kind of business is going to be successful in the franchise industry. You have to find out if your business can make it as a franchise model. The expert will make a feasibility study and you have to trust this expert if he finds that your business in not a solid investment. Only when the expert gives the ‘go’ signal do you proceed with your plan.

Utilizing franchise kits, Franchise Disclosure Documents (FDD) templates, and a franchise operations manual template is not commendable and its not going to save you anything. For instance, the FDD template consists of 12 chapters of data, touching myriads of topics & possibly even more secrets about the business operations. When you disclose it appropriately it will prevent some problems in the future that may involve going to court. Litigation costs with regards to franchising are very high nowadays. So if you are using a ready-made FDD template, expect to have future litigation expenses. It is better to draft a new FDD from scratch than just revise a template to suit your kind of business.

The same thing goes when using templates for franchise agreements. In the first place, the contract must be drafted from a skillful business perspective as well as a legal one. There should be a delicate balance between the two. You can never find a pattern that will meet both standards of business & legal measures. And what’s more is, these agreements have to be cross referenced with the disclosed topics in the FDD, revising the draft would be a real challenge and would therefore cost more.

You can use other manuals as a reference guide for composing your own activities, which would help you make things clear. But using a single manual as a template for your company would be detrimental to the business, a legal risk. The bottom line is using templates might save the company a lot of money but in the long run you will end up spending more than the initial cost because of legal disputes.

Starting your own business can be a daunting task; however, nearly everyone dreams of doing just that. Statistically speaking, the odds are greatly against you. The vast majority of startups fail in the first year of operation. However, there is a way that can really improve your chances of running a successful business. This can be accomplished by becoming a franchisee.

Buying a franchise is an option, it is buying into an existing business model were you will run your own business in a defined geographical area, you will receive support in the early stages when your business is starting up and you will be expected to use the methods and systems defined by the franchise. This may sound like a great option in that it does provide a tried and tested business model and does give the new franchisee support through the difficult start up phase of the business. However the purpose of this article is to highlight the disadvantages of the franchise, below are some of them:-

- buying a franchise can be very expensive, in addition there are usually ongoing annual franchise fees and a slice of your takings will have to be paid as royalty fees.

- one of the advantages of a franchise can also be one of the great drawbacks, the franchise is a tried and tested business model with everyone expected to strictly adhere to the defined methods and systems, which may not suit everyone especially the more entrepreneurial franchisees.

- the franchise is usually based on a geographical area and each one can be quite different to another, so the types of business and the demographics of a particular area may not be quite so advantageous to one franchisee as another.

- the actual franchise agreement should be considered for things like the duration of the agreement, thought must be given to what happens when the agreement ends, will the annual franchise fee go up?, could you work within the confines of the franchise for that period of time?

This list is not exhaustive, this article is not intended to stop people going down the franchise route but simply to highlight the drawbacks of the franchise model so that people may make a more balanced and informed decision.