One important consideration when prospecting for a good franchise business is:

• A. Choosing a franchise solely based on low initial fees
• B. Ignoring the terms of the franchise agreement
• C. Evaluating the franchisor's track record and reputation
• D. Focusing only on the popularity of the product

Answer: (C)

Verified step by step guidance

1. Understand the concept of franchising: A franchise is a business model where a franchisor grants the franchisee the right to operate a business using its brand, products, and operational methods.
2. Recognize the importance of evaluating the franchisor's track record and reputation: This involves researching the franchisor's history, financial stability, and success rate of existing franchises.
3. Avoid common pitfalls: Do not choose a franchise solely based on low initial fees, as this may overlook long-term profitability and operational costs.
4. Review the franchise agreement thoroughly: Ignoring the terms of the agreement can lead to misunderstandings about obligations, fees, and restrictions.
5. Consider the product's popularity in context: While a popular product is important, it should not be the sole factor in decision-making. Evaluate market demand, competition, and sustainability of the product's success.