At face value, opening a franchise might seem like an excellent idea. After all, you’ll get to be your own boss and control your destiny, right? Unfortunately, the reality isn’t always this glamorous.
When it comes to running a franchise, business is rarely simple, and despite what others say, you’ll never really own the business. Since people started franchising, many horror stories have come to the surface.
The problem is that many new franchises make too many fatal mistakes, which leads to the complete shutdown of their businesses. There are six common mistakes that new franchisees need to avoid.
Don’t Let Awards and Industry Rankings Seduce You
The entrepreneurial press champions many different franchises, and the reality is that many new franchises that are opened up with these companies end up failing.
In most cases, it’s better to run the other direction when you see too many positive awards, industry rankings and press clippings for a particular company.
All of the press attention that the company is getting is likely to be the result of an aggressive PR campaign than anything else. When considering opening a new franchise, never get seduced by false media attention.
Don’t Get a Franchise to Be the Boss
A lot of new franchisees only opened a business because they wanted to be the boss. While a franchise will let you be the boss over your employees, you’ll never be the true boss of your business. All franchising is based on uniformity and conformity. It’s not a model that is based on true freedom.
A franchise owner gets to be the boss of their own shop, but the corporate office is the true boss of the company. Some people have compared franchising to joining the military because it features a similar level of conformity.
Get a Seasoned Attorney before Signing
Another common mistake that new franchisees make is not hiring a seasoned attorney before signing on the dotted line. Experts are always amazed to discover how many new franchisees never hired a lawyer before they signed.
Since franchising has the potential to turn into a nightmare, it’s very important to seek legal guidance from a qualified franchisee attorney before any deal is made. Whenever there are hundreds of thousands of dollars at stake, it’s almost always a good idea to hire a skilled attorney.
Don’t Expect Help from the Government
Many new franchisees buy into the idea that the government will help. Since franchisees aren’t consumers, they’re not protected by the same laws. Instead, they’re treated as business investors and entrepreneurs.
Spend Time with Your Desired Franchise
Before taking the plunge and paying to open a new franchise, it’s important to spend some time with a franchisee and see how everything works. You might find that you don’t like the business.
Know the Marketing Costs
A lot of new franchisees don’t realize that there are many marketing costs that come along with opening a franchise. In most cases, these costs aren’t calculated into the actual contract, and depending on what is needed, marketing costs could require tens of thousands of dollars.
These are six common mistakes that all new franchisees need to avoid. By avoiding these mistakes, the chance of success is significantly increased.