The Indicators

3 Costly Mistakes First Time Franchisees Make

FranchisingThere’s undoubtedly great fulfillment in creating a business from scratch and watching it become a success story. But the competition in the business world can be brutal. It’s often much better to buy a franchise and acquire a proven business model. If this sounds like something you’d like to try, veer away from these mistakes as you make the purchase.

Buying without due diligence

The franchisee is solely responsible for doing due diligence before investing. If, for instance, you intend to open one of the renewable energy business opportunities and have identified a potential company, you need to conduct ample on the company research before signing on the dotted line. An excellent idea is to look for other franchisees under the same brand and ask them about their experiences so far.

Not taking location seriously

Location plays a great role in the success or failure of a business. Regardless of how well established your franchisor’s brand is, picking the wrong location could hamper your progress as a startup. Most franchisors work with franchisees to pick the ideal location for their business, but in the end, you must make a choice. Understand your target customers, and evaluate different locations to pick the most strategic.

Going at it alone

No amount of online research can substitute for the services of a specialist when it comes to the complex tax rules and contracts involved in franchises. That’s why you need a competent accountant and an experienced attorney to help you along the way. Sure, you’ll need to pay for their services, but it’s a small price compared to the cost of making blunders at this stage.
Buying a franchise may seem like a walk in the park if you’ve never done it before, but nothing could be further from the truth. One mistake in the process can ruin your chances of success.