There seems to be almost as many franchises to be sold as there are people buying them, but often there are challenges that get lost in translation and then there’s a challenge in dealing with not only the financial repercussions on both sides but also brand perception. The key point to remember is that there is no cookie cutter process for everyone but there are some basic items to ask and remember to write down your pros and cons before writing that check.
Do Your Research
- Google pretty much will tell you everything, regardless if it’s good, bad, or nonexistent so go through at least 2-3 pages to find out as much as possible
- Everyone can give a great sales pitch, but get it in writing so you have something to reference back to
- What do other franchisee’s having to say – remember try not to speak to the ones they recommend but find a few on your own
What’s Are the Financial Costs
- See the actual numbers in what your financial investment is, and figure out if you can afford to lose it if it doesn’t work out in the end
- What do you get for your royalty payment and how long of a contract are you locked into, as well as do you have a competitor’s clause preventing you to work for a similar competitor in the industry and what’s your experience with it?
- If you don’t have any type of financial background in ever running a business on your own, how are they going to help support you in your success?
The Worst-Case Scenario
- How far are you willing to go in order to make the business a success, i.e. 9AM-5PM Monday-Friday doesn’t make owning a business successful
- If you choose to pursue the opportunity, find an attorney who specializes in this type of work so they can warn you of any potential pitfalls before signing the agreement
- If you’re already working a job or your own business already, can you handle adding to another one, because there’s only 24 hours in a day
- If you’re required to purchase products from the business you’re franchising from, for how long is this requirement and what if you can find them cheaper for how long are you locked in?
There’s no such thing as mailbox money unless you were born into wealth and even in those situations there’s work along the way. I’ve seen situations where everything is laid out, what you should and shouldn’t do, working with you every step at the way to help ensure your success, but they don’t provide babysitting services. On the other side of the spectrum, there’ll be people who simply take your money and wish you the best of luck. Always expect that side of the spectrum when you’re exploring the opportunity of a franchise purchase, so you become your own babysitter and learn to succeed with your new business venture.
Dwayne J. Briscoe