Online store franchise or independent online store: what should a buyer weigh?

Franchise and independent are both ways to own an online store, and the useful question is who holds the keys. In a store, the keys are the platform account, the domain, the advertising accounts and the customer list. Whoever holds those holds the business. Read the franchise paperwork with that in mind, and have a lawyer read it with you.

Who controls the store itself

Ask whose name is on the platform account, the domain, the social accounts and the ad accounts. Ask who owns the customer list and whether you may use it after you leave. If the franchisor owns them all, the store depends on the franchisor’s accounts. Ask your lawyer what that means for you before you sign.

Suppliers, products and territory

Find out whether you must buy stock or services from the franchisor or approved suppliers, and whether you may add products of your own. Then ask what a territory means for a store that ships anywhere. Can the franchisor, or another franchisee, sell to your customers online? Get the answer in writing, in the words of the agreement.

When the term ends, and how others have fared

Ask what happens to the store, the accounts and the customers at the end of the term, or if you sell during it. Many agreements need the franchisor’s approval of a buyer. Then speak with current and former franchisees, using any list of franchisees the franchisor provides, and ask your lawyer what the franchisor must disclose. Ask what they earn compared with what they were told to expect.

If you are still deciding between starting fresh and buying something running, see whether to buy an existing online store or start one.