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Why The Franchisor Needs to Approve The Buyer

A franchisor’s best asset is a team of good franchisees. As a franchisor hopes to expand their business enterprise by increasing the number of franchise locations, it would serve little purpose to open new franchises if the franchisee’s failed a few months into operations leaving the franchisor with a huge administrative expense.

In addition, the franchisee needs to be experienced in management, have a good credit history, and be capable of learning the normal operating procedures.

Therefore, the only way of ensuring a high success rate for the overall franchise business is to screen applicants for approval prior to signing a franchise agreement.

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