Top 5 Biggest Mistakes People Make When Purchasing a Franchise
There are close to 800,000 franchises in America that employ more than 8 million workers. Purchasing a franchise can be a good option as they provide an existing well-known brand and typically a template for success.
Starting a business from scratch can be tough. A good alternative is to purchase an established franchise brand. When buying a franchise you need to tread carefully so that you don’t make a huge financial blunder. Franchise Eagle Consultants can walk you through this process.
You should do adequate research to know what you are getting into before putting any money down on a franchise purchase. Start your research with this article all about the top 5 biggest mistakes you can make when buying one.
1. Not Researching Business Metrics
You need to have a good idea of how successful the franchise you are considering buying is. Know what its total profit potential is factoring in all streams of income and overhead costs.
You need to know how large the franchise’s territory is and what the potential for expansion is. Most of all you need to get a good understanding of how much it costs to operate your business until you can turn a profit.
2. Not Talking to a Franchise Consultant
If you don’t know much about the world of franchising you need to talk to someone who does. Reading online advice will only take you so far. A franchise consultant can provide the expert guidance you need.
We will take you through a 5 step process that will help you determine the best purchasing decision for yourself. Don’t try to muddle through the world of franchise purchasing by yourself. Seek expert help.
3. Purchasing a Franchise on a Budget
You should not attempt to purchase a franchise unless you have a suitable amount of money to bankroll it.
At Franchise Eagle we can help put you in touch with qualified lenders such as BDC: (Business development bank of Canada), or reputable entrepreneurial lenders in the USA.
4. Not Being Fully Committed
When you run a franchise you will be married to your business. Expect a rewarding career, but also long nights and weekends at the office. Don’t expect to “get rich quick” from a franchise. This is a long-term commitment. Running a franchise like any business is a substantial investment of time, money, and energy. However, the reward is worth the effort.
5. Overextending Your Reach
If you have a large bankroll and a ton of ambition you may be tempted to buy more than one franchise location at once. Resist this temptation. It is almost always better to buy one location and build from there.
Unexpected challenges will come up and if your attention is spread too thin all of your locations will suffer. Buy one location first, and then use the profits earned here to invest in another location later.
You Can Become a Franchise Master
Purchasing a franchise is an exciting proposition and a great way to secure your financial future. It is also a huge responsibility and unexpected issues will arise. Franchise Eagle is there for you to help guide you throughout the process.
Contact us today for a no-risk assessment on what your best course of action is for franchise purchasing. We can help you through every step of the way of your decision-making process and help you get started franchising!