There continues to be a number of individuals that look to purchase a franchise without the benefit of professional advice. It can be the biggest mistake they will ever make.
Based upon e-mails and comments I receive from prospective and existing franchisees and feedback from franchise attorneys it’s obvious to me that some individuals continue to evaluate and purchase a franchise without the benefit of professional advice or counsel. Despite admonitions ranging from the American Association of Franchisees and Dealers to the International Franchise Association to franchisors there are certain people that just don’t get it. Whether you’re considering the purchase of a simple franchise concept that requires a small investment or a franchise that includes a bricks and mortar location you need to have professional advice at some step in the process. The only people I would exclude would be a franchise attorney with a financial and franchise operations background. I haven’t encountered many of them purchasing a franchise.
The numerous articles and blogs that recommend prospective franchisees to utilize professional advisors typically base their recommendation for the following reasons:
However, there are other reasons, some not so apparent, why it’s important to utilize professionals in the pursuit of a franchise.
Although prospective franchisees are strongly advised to engage professional advisors as part of their franchise process some individuals continue to go it alone. This approach is reckless and in the end can be costly. When it comes to utilizing professional advice in the franchise process the biggest mistake is to be penny wise and pound foolish.
60% of franchisors provide a financial performance representation (“FPR”) under Item 19 in their Franchise Disclosure Document.
As part of a franchise candidate’s due diligence process, it should be expected that certain questions will be directed to franchisor staff.
It was quickly apparent that some employees struggled working from home. They had never experienced the challenges associated with time management.
There have been various changes in average franchise investments during this time, some changes were more dramatic than others.
Before a prospective franchisee invests they must review the information disclosed in the Franchise Disclosure Documents.
A good consumer experience is not a reason to invest in a franchise. It skews the decision-making process of a prospective franchisee from start to finish.