What investors need to understand before buying a franchise

Franchising has been one of the most popular growth strategy for most small businesses which generated a lot of successful names in the industry. Most franchises are successful since the system itself creates synergy. Businesses working together under one brand or trademark can achieve exponential growth due to leveraged advertising, buying power and fast growth. Although along with success, there is failure.  It is there vital that investors  need to understand:

Starting a franchise does not guarantee you to earn.

Even if you are part of a successful franchise, you are prone to lose money especially during the early stages of your business. You cannot simply rely on the success of others, you have to do your homework to make your end of the business a success.

I remember dining at a Kenny Rogers Restaurant when SM Lucena opened back in 2003, couple of years later the store closed. What made them fail? I don’t know, maybe they did not perform the Sustainable Restaurant Services grease trap cleaning on time, but the point is – Kenny Rogers Roasters is a successful franchise, everybody knows that.

A franchise is a long-term investment.

It will take time to develop your business before you get a point where you are able to pay off loans you invested in the business and start earning profit. This time depends on the actual effort you put into your business, and you may end up losing money.

You need to follow the rules.

When you signed that contract, you have agreed to follow their way of doing the business. You will be given specific instructions on how to run your business.

A franchise requires a big start-up costs.

When you are considering this type of business, you need to make sure that you have enough money to sustain your family or own personal expenses while developing the business. Should your business fail, you need to have enough money to pursue another business or continue to make it profitable.

The franchisor may go out of business.

Like any other business there is a possibility of failure on the part of the franchisor. If these happens, you will also suffer.

 

Want to know more about franchising?

You’re about to learn:

  • Why most franchisees fail – and you how can easily avoid making the same mistakes!
  • How to get all the inside information you need to pick the most profitable franchise for you – all without wasting years of your life doing research!
  • How to make more money than you ever dreamed possible as a medical franchise owner – you’ll be amazed at how easy it is to do when you follow my simple tips!

Franchises Uncovered: The Truth Behind The Franchising Industry

 

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One Response to “What investors need to understand before buying a franchise”

  1. […] advice and previous problem involving the franchise in the market place. So, beware and take pre-cautionary measures in choosing your franchise. This sounds pretty easy, and a slick franchisor will make it sound […]

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