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.
But Beware of These Franchises
If you’re considering a franchise and are performing your due diligence, be cautious 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.
No matter what, it’s a good idea to hire an attorney that specializes in franchising to help you see it all the way through.
