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Chapter 2. The Franchise Relationship Mo... > Agency Issues: How to Find the Right...

Agency Issues: How to Find the Right Franchise Partner

A key issue raised by any strategic business interdependency is the partner selection process and the ensuing principal-agent relationship. The agent, in most cases the franchisee, agrees to act on behalf of the principal, the franchisor. This symbiotic partnership is one of the key success factors of franchising; it is also one that requires considerable vigilance.

Is This Franchise Right for You?

One of the advantages of franchising is the abundance of information available to the franchisee. Not only do state and federal legislatures mandate the disclosure of pertinent financial information, but there is also a wealth of other current and useful information available. Although considerable due diligence information is available, potential franchisees are sometimes less rigorous about their investigation than they should be. They can quickly fall in love with a concept and forget to do the detailed due diligence on the franchisor that should be done and is readily available.


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