Ten Things to Watch for with Franchises

Don’t Have a Big Idea but want to be on Your Own?

Joining a franchise system might be the best thing for you if you want to be a business owner but not from scratch. A franchise might work if you:

·        Are drawn by the security of having an already-branded business with proven services or products.

·        Like the idea of an operation that has already done the hard trial and error work of establishing business operations and building a demonstrated support system.

·        Are comfortable with following franchise guidelines.

·        Already have or can get the franchise fee and startup costs.

·        Are willing to part with some of what you make in the form of monthly royalties, advertising fees and other costs.

·        Know it will take a lot of work and are willing to do it.

Even if you’re okay with these factors, it’s a good idea to hire an attorney that specializes in franchising to help you see it all the way through.

Ten Things to Beware of from a Potential Franchise

If having a franchise does appeal to you, be wary of franchises that:

·       Do not offer a proven business concept coupled with a successful operational system.

·       Lack brand recognition.

·       Have a history of litigation or continual strife with franchisees.

·       Offer minimal startup help and little ongoing training and support.

·       Advertise very little if at all.

·       Balk at territory exclusivity

·       Are reluctant to give you a list of former and current franchisees.

·       Use franchise fees to pay for selling new franchises.

·       Obligate you to purchase services, inventory or supplies from their approved vendors (or the franchise itself) at inflated prices.

Being a franchisee can result in a fruitful work life. Just make sure you perform proper due diligence.