If you have a strong entrepreneurial spirit, but don’t want to brand your own business from the ground up, then you may make a really great franchisee. When you buy into a franchise you have a lot of the same responsibilities to keep the business up and running as an independent business owner, but most of your promotional materials and branding are provided for you. Defining your voice and branding your business is extremely difficult and often outrageously expensive. However, just because a lot of that will be taken care of by your franchisor, it doesn’t mean that there aren’t some very tragic pitfalls that you could succumb to. If you’re thinking about buying into a franchise, here are 5 ways to avoid common mistakes that new franchisees make.
- Don’t buy into a franchise that you don’t believe in. You need to be truly passionate about the product you are selling in order to make it through the times when business slows down. If you buy into a franchise in the food industry, you should be selling food that you want to be eating very regularly. It doesn’t have to be every day, but you have to like it so much that you know you won’t get tired of it.
- Don’t expect your franchisor to do everything. Many people buy into a franchise business rather than starting their own because they think that their franchisor is going to take care of all the hard stuff. This couldn’t be further from the truth. Be sure to read your contract multiple times and go over it with both a lawyer and your accountant. If they tell you that it all seems fair and logical, then you’ll probably be okay. You just want to know exactly what you’re getting into.
- Don’t hire just anybody. Even if you are hiring for entry level jobs that don’t require much experience, you want to be sure that all of your employees have a very strong work ethic. If they are high school students, you will want to ask for their high school transcripts and you will definitely want to call their references before you start filling out any tax documents.
- Don’t buy into a saturated market. If you visit FranchiseExpo.com you can get an idea of how many other similar franchises are already located within your community. If there is a coffee shop on every corner or in every shopping mall, then you won’t want to open a coffee shop.
- Don’t forget to read the fine print. Some franchisors will put their franchisees into such insurmountable debt that they have no choice but to slave away for a measly percentage of the profits they are making. One great way to get an idea of how a particular franchisor treats its franchisees is to actually go into several locations and talk to the owners about their satisfaction with their superiors.