5 MISTAKES TO AVOID WHEN
BUYING A FRANCHISE
No need to research, my friend told me it's a good business
Getting recommendations from a friend is great, but make sure you do your own research. Go to one of their stores and talk to the franchisees. Research about the owners and review all the documents they give you before committing to the franchise.
They promised I will get my money back in 6 months
Great franchises base their financial projections on their existing stores. While this is a good base, it is still, in essence, a prediction. A franchise is your own business, so no one can guarantee your profits because it all depends on how much effort you put in, the location you have, and the support you get from the franchisor.
It's so easy to run, there's no need for a franchise operations manual
Franchising is about using the Franchisor’s brand name and system. For it to work, you need to be able to learn the system well. Make sure you ask the franchisor for a properly documented operations manual as this will be your guide as your run your own franchise business.
They agreed to give me extra support even if it's not in the franchise agreement
Anything you agree on should be in the franchise agreement. Read this agreement carefully and if someone promises you something that is not in the agreement, clarify with them and make sure it is written down before signing anything.
I invested my kid's college fund to buy a franchise
A college fund or your personal emergency fund should be left as that, a back-up fund in case you need it. Although franchising has a 90% success rate, there are still risks involved and you should just invest money that you are personally comfortable with.