Things You Should Know Before Buying a Franchise
Jack Armstrong
Senior Franchise Consultant helping clients purchase the right franchise or existing business
Before buying a franchise, it's crucial to be aware of certain undesirable traits in both the franchise system and your own readiness as a prospective franchisee.?
In the Franchise System:
1. Insufficient franchisor support in training, marketing, operations, or problem-solving is a significant concern. A good franchise system should offer comprehensive and ongoing support to its franchisees.
2. Be wary of franchises that do not disclose financial performance data or have a track record of failed franchise units. This could indicate underlying issues with the business model or market saturation.
Understand Your Rights
3. A high rate of franchisee turnover or many franchises for sale could signal dissatisfaction among current franchisees or financial unviability.
4. Excessive litigation involving the franchisor may indicate systemic problems or poor relationships with franchisees. While some litigation is normal, frequent legal issues are a red flag.
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5. Overly restrictive franchise agreements that limit your ability to make business decisions or exit the franchise can be detrimental. Understand your rights and obligations fully before committing.
In Yourself as a Prospective Franchisee:
1. Ensuring your personal and business values align with those of the franchisor is crucial for long-term satisfaction and success.
2. Underestimating the total investment needed, including operating expenses until the business becomes profitable, can lead to financial strain.
3. Not performing thorough due diligence on the franchise, including speaking with existing franchisees, can leave you unprepared for the realities of the business.
4. Expecting immediate success without recognizing the need for hard work, patience, and time to grow the business is unrealistic and can lead to disappointment.
Identifying these undesirable traits early in your research process can guide you towards making a more secure and suitable franchise investment.
I can help you figure out what is the best fit for you. I have been doing this for twenty-nine years and have helped hundreds of people find success. Give me a call, email, or text. I would love to chat with you.