In evaluating and buying a franchise, there are many things you should consider. Not every franchise is a good investment. You should analyze any franchise offering carefully and make sure it does not contain one or more bad provisions that are inconsistent with what you should reasonably expect. Here are 5 key things to look for:
Beware of Boilerplate Disclaimers
If you are considering buying a franchise, you should beware of boilerplate disclaimers. They come in many forms. Some are buried in the fine print near the back of a thirty-page franchise agreement. Many are duplicated in a separate document back near the receipt in the FDD. They are back there so you will not notice them until it is too late. The salesperson certainly hopes you will never read and understand them.
Best Practices-New Accounting Rules Are Delayed (Tentatively)
The Financial Accounting Standards Board (FASB) met on April 8, 2020 and agreed to delay the effective date of the modified Rule 606, which changed the way companies recognized revenues. In effect, the extension would be for one year. However, the extended effective date is subject to a fifteen day comment period and final adoption by the FASB.
