Planning to buy a franchise is exciting yet can be overwhelming with all the choices that are available. You want to make sure the franchise is a good fit with your interests, at the right price, and is also a business model that you can have confidence in. There are many considerations when choosing the right franchise. Here are the top four common mistakes to avoid when buying a franchise so that you’ll enjoy your decision for years to come.
1- Lack of Research
It’s imperative to do extensive research into the different franchise options that you are interested in. Just because a franchise may look like a great business on the outside doesn’t mean it’ll be that way when you dig into it. Read through not just what the franchise is offering, but also do heavier research such as their reputation in the marketplace, if there have been any complaints against them with the local business bureau, and if they have a strong social media presence. Gather as much information as possible to make an informed decision.
2- Avoiding Expert Guidance
You may think that deciding on a franchise that’s right for you is an easy endeavor. However, regardless of whether you’ve owned a franchise before, a common mistake is to avoid seeking expert advice and guidance from a professional franchise consultant. These franchise consultants are well-equipped to tell you the ins and outs of franchising including any details that you may unknowingly overlook, the legal and financial aspects of the particular franchise you’re interested in, and how to navigate the buying process. Seeking a professional franchise consultant is especially important if the franchise opportunity has a hefty price tag. You want to make sure you’re putting your money into the best opportunity possible and a franchise expert can help steer you in the right direction.
3- Disinterest in the Industry
Even though a franchise may look like a great opportunity due to its price or if it’s a well-known establishment, make sure that you’re personally interested in the industry and topic. If you have a passion for flowers but purchase a franchise in the automotive industry, there is a high chance that you won’t be interested in the franchise business long enough to see significant profits from it. Choose a franchise opportunity that you are personally interested in to give yourself the highest probability of success.
4- Just Looking for Money
When comparing different franchising opportunities, a big mistake is looking for the franchise that can yield the highest amount of revenue. We want a franchise that can be a lucrative investment, yet at the same time don’t only chase the money. All businesses have the chance to become successful regardless of what they sell, and a common mistake to avoid when buying a franchise is to only be interested in the monetary prospect of it. Other factors that need to be considered are how much time you can realistically spend to work on it, how many employees you may need, how much inventory is going to cost, and approximately how long it will take to break even on your investment.
Buying a franchise is a big opportunity to create wealth through purchasing a business that already has a proven track record of success. Franchises are a great way to invest in a business that has a sales process in place which will save you years versus starting a business from scratch. Avoiding common mistakes when purchasing a franchise is important to save you time and possibly a lot of money with your decision.