Things You'll Need:
- Computer with Internet access
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Step 1
Obtain the Franchise's Uniform Franchise Offering Circular documents from the franchisor as soon as you become seriously interested in subscribing to the franchise.
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Step 2
Budget at least 1 hour to examine the Uniform Franchise Offering Circular carefully for the bankruptcy history of both the franchise and its owners. Bear in mind that bankruptcy proceedings over a decade old may not appear on these documents or in the credit history of the franchise owners.
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Step 3
Verify a lack of bankruptcy proceedings indicated in the Uniform Franchise Offering Circular documents verbally with the franchisers, noting any discrepancy of information and dates as an indication of false intention. Trust is vital to any business arrangement. Protect yourself!
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Step 4
Ask permission to run a credit check on the franchise owners, or request a copy. Those with nothing to hide should comply with this request or offer a reasonable explanation as to why they cannot.
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Step 5
Run a credit check on the franchise and its owners to verify the accuracy of UFOC documents, for a slight fee, utilizing any online credit verification service. Save money in the long term when you obtain historical financial information in advance of signing a Franchise Agreement.
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Step 6
Hire a franchise lawyer to conduct your due diligence for you, if you can afford it.
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Step 7
Visit information Web sites like AllBusiness.com and Franchise411.com to learn more about obtaining a franchise's bankruptcy history and other aspects of franchise law (see Resources below).
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Step 8
Use the American Franchisee Association as an informational resource on franchise law (see Resources below).










