Mistakes to Avoid as a Franchisee
June 16, 2022
Starting a franchise can be an exciting thing. Becoming a franchisee can result in great success. However, it is vital to remember that a franchise can be just as risky as any other type of business. You need to be careful not to make some mistakes when starting a franchise. Your business could fail if you make the wrong decision when starting or soon after starting.
The following are six mistakes to avoid as a franchisee. Avoid these mistakes at all costs and increase the chances of your franchise succeeding.Not Exploring Your Options
It is crucial that you consider all your options when looking at franchise opportunities. For example, do not just look at the large, well-known brands. It is possible for a smaller business opportunity to have a strong financial performance, so do not ignore smaller businesses. Also, when looking at franchise opportunities, remember that the franchise industry consists of more than just restaurants and retailers.Not Conducting Enough Research When Choosing a Franchise
Maybe it is a business's mission and values that you find attractive. Or, perhaps you love the products the company sells. Do not buy into a franchise because of such things. There is a lot you should consider before making your final decision. Ensure you conduct thorough research before settling on a franchise.
To find out about a franchise, you can approach existing franchisees. People who are already in business can provide you with information about, among other things, the effectiveness of the franchisor’s training, support, and systems.Failing to Review the Franchise Disclosure Document (FDD) and Franchise Agreement
The franchise agreement and disclosure document contain information that can help you as a prospective franchisee make a well-informed decision. Therefore, ensure you review the FDD and franchise agreement thoroughly. For example, in the disclosure document, you can find information about the franchisor's business experience and prior civil, criminal, or insolvency proceedings. In the franchise agreement, you can find the guidelines you are expected to follow in operating your business.Not Hiring a Lawyer
Joining a franchise program is not something you should do without the help of a professional, especially if you have never been a business owner. A lawyer can help you with many things. For example, they can help you fill out legal documents and understand legal documents. For example, a qualified lawyer can help you understand a Franchise Disclosure Document.Not Utilizing the Franchisor’s Support
After settling on a franchise, you need to utilize the franchisor's support. Remember, the franchisor has experience and knowledge that you might not have. Take advantage of this.Straying From Your Business Plan
You need a business plan even if you are buying into a franchise with existing procedures and systems. But having a business plan is not enough. You need to stick to your business plan and avoid straying from it without a sound reason. Before you make changes, it is best that you conduct thorough research. Do not assume things.Contact a Business Attorney Serving Santa Clara County and Silicon Valley
If you are looking to buy into a franchisee and would like to hire an attorney, contact the experienced business attorneys at SAC Attorneys LLP.