subject: Want To Own A Franchise? First Get A Reality Check [print this page] Want To Own A Franchise? First Get A Reality Check
When you make the decision to 'move forward' and buy a franchise, the natural reaction of entrepreneurs is to get going NOW. I totally understand. The reason we're entrepreneurs is because we make stuff happen and nobody tells us what to do.
Bottom line is most mistakes will occur during this crucial time period. It's so important just to slow down, take a deep breath and resist the natural feeling of 'I've got to have it now!'. Inside this article, I'm going to give you 4 amazing tips to consider before you buy a franchise.
1. Don't rush and choose wisely - It's so important to do you due diligence before you make the decision to buy a franchise. You must think about and know how much money you have to invest, what your abilities are in running a business, and what your long-term goals are. What happens is far too often entrepreneurs never put together a business plan nor do they set goals for what they want to accomplish. They just don't. Well, the old saying goes 'if you fail to plan, you plan to fail.'
2. Be informed - Quite often, first-time franchise buyers dive right into buying a franchise without any knowledge of the in's and out's of franchise relationships. They also don't really understand the viability of the industry they are choosing nor do they conduct enough research on the company they're looking at. More importantly, first-time franchise buyers don't understand the legal consequences of the contract they are signing. What they should do besides what was just mentioned is to get to know the leadership of the franchise and find out what core values the leadership believes in. Try to poke holes in their franchise culture because the right culture is everything.
3. Consult with experts - Signing on the dotted line and making an agreement with the franchise corporation is serious business. Stop for a minute, take a deep breath and consult with a franchise expert first to see if owing a franchise is really the right decision for you. Doing this could pay you huge dividends with avoiding expensive litigation down the road. It's also a good idea to consult with an accountant familiar with franchises to understand all the tax and legal advantages by owning a business.
4. Understand the FDD - The Franchise Disclosure Document, or FDD, is the legal document outlining the agreement between you and the franchisor. Now it's important to understand that in this agreement, you don't get what's fair or what you deserve. You get what you negotiate! You can either negotiate by yourself or you can get legal council to negotiate on your behalf. The choice is up to you. The FDD has all the essential information you need about the franchise including all former and pending litigation against the franchisor. The FDD has a 14 day 'cooling off' period for you to do your due diligence before any monies can be collected.
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