1) Request an information packet from the franchiser. 2) Interview owners of current franchises. 3) Research the industry and other franchises in this industry. 4) Seek expert advice to better understand the franchise agreement. 5) Review costs related to getting into this franchise and compare them to the costs of starting a nonfranchised business in this industry.

Within the same industry, why does it cost so much more to get into some franchises than it does others?

Some of the most common reasons for this are:

• The more expensive franchises are better known in the marketplace, therefore they can command a higher price (oftentimes you are buying into the value of a well-known name). The less expensive franchises may not have any name recognition and are therefore looking to expand their presence in the market by offering their franchises at a much lower price.
• The more expensive franchises probably have proven formulas for success, which means your investment risk factor will be lower than it would be for a less proven franchise system.
• Also, you will find that those more established franchises that have experienced a long history of advertising and promotion of their products have, in turn, created a higher level of demand for their products, which results in a premium price for their franchise.