If you’re at a stage in your life where you’re financially ready to start your own business and you feel that you have amassed enough knowledge and experience to bolster your odds of success, you may have started looking into options that will move you forward professionally. And unless you happen to have a highly innovative idea up your sleeve, there’s no reason not to look into the possibility of franchising. You’ll not only get to take advantage of an established brand and the customers that come with it, but you’ll also enjoy the fact that a lot of the startup tasks have been completed for you and the kinks have been ironed out where general business operations are concerned. It’s virtually a turn-key business proposition but for finding and establishing your own location. Of course, it’s easy to make mistakes along the way if you’re not careful, so here are a few common missteps to avoid.
- Research the franchise. As with any business proposition, it’s important to know what you’re getting into so you’re not surprised down the road. What this means when buying into a franchise is doing a little digging to find out what you can about the operation. You can find a lot of generic information available online pertaining to customer complaints, lawsuits, and store closures, on the one hand, but you can also look for the company’s mission statement, annual financial reports (if the company is publically traded), and consumer and franchisee reviews.
- Read the contract. Before you scrawl your John Hancock on a franchise agreement, you’d better make sure you’re prepared to live with all the fine print. This not only means reading the contract, but also understanding what it says, which can definitely be difficult when you’re combing through legal jargon. That said, you’re the only one who’s bound to suffer if you fail to perform this essential task. Even if you feel that the franchisor is trustworthy, you are the only one responsible for protecting your interests, so don’t take them at their word. Read and understand your contract before you ever consider signing it.
- Use legal and financial resources. The good news is that you don’t have to go it alone when it comes to purchasing a franchise. There are plenty of specialists that can make sure you get the best possible deal and that you’re aware of your duties and dues going in. You’ll probably want to start by hiring an accountant that has experience dealing with franchising finances to make sure that you plan for appropriate funding. And then you should find an attorney that can look over your contract.
- Talk to other franchisees. Since you will be inextricably linked to the franchisor, you need to know who you’re getting in bed with, so to speak. The best way to do this is to talk to other franchisees to get their take on the franchisor, including the good, the bad, and the ugly of the arrangement.
- Explore all options. If you’re interested in purchasing a franchise, you should know that it’s always best to explore your options before making your selection. By attending a franchise expo you can get a good idea of the businesses that offer franchise opportunities. And this can help you to determine which franchise is best suited to your tastes.
