Franchise Evaluation Checklist: B

The Franchiser and the Franchise

1.      Is the potential market for the product or service adequate to support your franchise? Will the price you charge be in the line with the market?

A: Children nowadays are needed more education. I believe it is a huge market to make it big. The price is in line with the market and it is affordable.

2.      Is the market’s population growing, remaining static, or shrinking? Is the demand for your product or service growing, remaining static, or shrinking?

A: From the recruitment of students , we found that students recruited every year remain static, It doesn’t have a big differences.

3.      Is the product or service safe and reputable?

A: Yes for sure

4.      Is the product or service a passing “fad”, or is it a durable business idea?

A:  With the established of 10 years, I believe MRC have its own quality of identity, and it is recognized by all over Malaysian especially Chinese.

5.      Wha will the competition, direct or indirect, be in your sales territory? Do any other franchisees operate in this general area?

A: Yes, there are 4 different education franchise at my are but it doesn’t affect my business growing.

6.      Is the franchise international, national , regional, or local in scope? Does it involve full- or part-time involvement?

A:  SMM is a international company. It’s only for full-time involvement.

7.      How many years has the franchiser been in operation? Does it have a sound reputation for the honest dealing with franchises?

A: 10 years they have in operation. Well, people talking about Whole Brain Education, they will it is MRC. I believe this is the reputation deserved to them.

8.      How many franchise outlets now exist? How many will there be a year from now? How many outlets are company owns?

A: around 500 outlets now exist. Some of them were 8 years old. Company owns outlets is around 10.

9.      How many franchises failed? Why?

A: There are seldom franchises would failed unless they didn’t follow the business modal of the company.

10.  How many franchises have left the system within the past year? What were their reasons for leaving?

A: As I know, there is no franchisee leave for the past year

11.  What service and assistance will the franchiser provide? What kind of training program does the franchiser offer? How long does it last? What topics does it cover? Does the franchiser offer ongoing assistance and training?

A: The HQ always provide training for BAs, by time to time. It’s covered business development, product information, business talk , etc.

12.  Will the franchise perform a location analysis to help you find a suitable site? If os, is there an extra charge for doing so?

A: The company will analysis a strategic place for potential franchisee. There’s no any payment for this.

13.  Will the franchiser offer you exclusive distribution right for the length of the agreement, or may it sell to other franchises in this area?

A: No. All the franchisee get the equals services.

14.  What facilities and equipment are required for the franchise? Why pays for construction? Is there a lease agreement?

A: We have to rent or buy a assets for our kindergarten, like a house. For JSP they needed to locate themselves in office block. Normally the construction fees we paid ourselves, and there’s no lease agreement between us and the company.

15.  What is the total cost of the franchise? What are the initial capital requirements? Will the franchiser provide financial assistance? Of what nature? What is the interest rate? Is the franchiser financially sound enough to fulfil all its promises?

A: There is RM30,000 for the franchise. There is no financials support from the company.

16.  How much is the franchise fee? Exactly what does it cover? Are there any confiny fees? What additional fees are there?

A: RM30,000. It’s covered licence from the company only.

17.  How risky is the franchise opportunity? Is the return on the investment consistent with the risk?

A: There is a risk that we need to compete with other franchise education.

18.  Does the franchiser offer a written contract that the covers all the details of the agreements? Have you attorney and your accountant studied its terms and approved it? Do you understand the implications of the contract?

A: There is written contract and we known it as our constitution. I have read it through and I know the implications of the contract.

19.  What is the length of franchise agreement? Under what circumstances can it be terminated? If you terminate the contract, what are the costs to you? What are the terms and costs of renewal?

A: If we provide others franchise education materials, we will terminate. I will lost the potential of the business and may face court. There is no renwal available.

20.  Are you allowed to sell your franchise to a third party? Does the franchiser reserve the right to approve the buyer?

A: We are disallowed to sell the franchise to third party. The company reserve the rights to approve the buyer. All is interchange must be made through company.

21.  Is there a national advertising program? How us it financed? What medea are used? What help is provided for local advertising?A:

A: To ensure standardize, All the advertisement design is made from HQ. There is national advertising program that all the centre will have their page number inside, so that the potential customer will locate you which nearest to him.

22.  Once you open for business, exactly what support will the franchiser offer you?

The study kit, the business development strategy and training about education

23.  How does the franchise handle complaints form and disputes with franchisees? How well has the system worked?

A:  HQ will handle the complaints and settle down with the franchisees. Normally the marketing department will solve it well.