RISKS TO OPEN A FRANCHISE IN BRAZIL

Start a business activity is to know what the risks stocks. You can escape the higher risks and lower only minimize them with good management. The success and failure of any depends on watchful eyes of implementing acts and it is necessary more work based decision making. Decisions are previous choices in which each behave following the chosen activity.

The franchise  can help those who want to act in a sector providing products, services, or both, must keep with the standards required by the franchisor, as contractually agreed forecast.

In this context, each prior decision should give some wisdom, that is, which brand, product or service will operate in the market. Will be waived any outstanding factor concerning the renowned franchise, the contractor must hold specific knowledge. Thus, it becomes necessary to bring to this text a question: What are the risks of opening a franchise? The answer to this question takes on a primordial and attentive contact the key factors that will be discussed in the following topics:

1. Not knowing the "terrain that is trampling"

Among one of the major problems is related to prior knowledge. Certainly, it is not required any technical or even academic background to open a franchise, however, one must understand the real meaning of the franchise.
Under the legislation in force (art. 2 of Law no. 8,955 / 94) it is a system whereby a franchisor grants the franchisee the right to use the trademark or patent, associated with the right of exclusive distribution or semi- Exclusive products and services and possibly also the right deployment technology use and business management or operating system developed or held by the franchisor, through direct or indirect remuneration, without, however, be characterized employment.

Simply put, the franchisor grants authorization provided for in the contract so that the franchisee use products and / or services must pay to the franchisor.

It is essential to the contractor of a franchise not only the knowledge of the above institute, because from the moment that the person becomes franchisee, via a consequence, assume that all contract performance points were treated, including the risks of the activity.

The preliminary stage of a franchise agreement requires prior research to find the real viability of the activity, such as lifting and the history of the company that provides the brand, product or service.

Prior knowledge, sometimes treated again and again, lining up in a position where the contractor will know which branch of activity to be exercised, as well as your target audience to achieve the desired success. There needed to score a point, with respect to acts of the franchisor, whose task was to provide all clear and accurate information of its activities and all its coordinates, step by step.

2. A careful reading of the franchise agreement (or inattention)

Another essential point is the careful reading of the clauses contained in the franchise agreement and all the necessary interpretative elements for managing the business.

No doubt some, the failure of any of the contractual clauses may result in the loss of the contractual object and culminate in severe financial losses, including a unilateral termination of the contract and can be from any of the parties, provided that pointed to the act of irregularity or illegality, as appropriate.

That's why we recommend a follow-up a professional, especially a lawyer, so read the terms of the contract, interpret them, presenting their point of view, according to current legislation. Depending on the complexity, the professional will prepare an opinion pointing out the pros and cons of contractual clauses.

3. Financial analysis of the viability of business activity

Planning is necessary! All are tied to financial and economic aspects, as a franchisee "dies", giving more continuity of activity forecast in the franchise agreement, the result via the result will be the disqualification of the franchisor's name.

On the one hand it will be up to the franchisor honestly present the risks of the activity that so provide, the other will fit the franchisee plan is in order, to observe the working capital, as well as understand that sometimes there will be delay in financial return , considering that this is not an exact science and requires a little more patience.

4. The choice of the Trade Point

        The point of sales is the qualified place to position the company as a result of the exercise of establishment, so, be available to consumers. To cite examples, a tire repair shop opposite the garage; gourmet network in a commercial heart.

Again, reading the franchise agreement will be indispensable, given that, depending on the contractual clause, will be in charge of both the franchisor and the franchisee in selecting commercially.
The risk is related to inappropriate sites or low viability for the installation of a franchise, and result in a negative outcome to the enterprise.

Final considerations

Finally, it is essential that the business owner has prior knowledge of the business should start to pay attention to contractual terms, their interpretations and restrictions.

A legal support also becomes appropriate with a view to avoid any losses, both pre-contract, as post-contractual (the latter did not mention the text above, however, it is essential that the franchisee have a legal professional, law firm to aid in managing the activity).


The financial analysis from any values ​​on the working capital it is necessary to be alert and avoid future risks. The point of sales, ie the place where the activity is exercised is an important factor for business success.

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