• Sam Christopher Lim - SVP Francorp Philippines

Avoid these 3 pitfalls when investing in a franchise

As seen on Entrepreneur Philippines.

One of our greatest successes as a country is having over a 150,000 franchise outlets with thousands of happy franchisees.

With its high-acceptability and 90% success rate over traditional do-it-yourself businesses, it has been a pretty typical case that a franchisee can own two or more franchise stores.

Another great story is that a franchisee can actually own two franchise concepts, differing in category, because of the great business experience with the first.

Although there are a lot of success stories, there have still been a few that have failed, and it almost always starts with their mindset.

Here are the three common pitfalls you have to avoid when plunging into franchising:

1. Wanting fast returns

In starting up a business, most Filipinos are more enticed on how fast the returns can get. The mindset is “I don’t care about the brand and products, I just need fast returns.” Some are frenzied by one to two months return on investment, without thinking about long-term sustainability.

We tend to generally think that it is safer to get your capital back 100%, the fastest way possible, than thinking about how long the business can compete in its industry and its potential to be a market leader.

When thinking about the franchise business you have been waiting to have, it is a good exercise to do a long-term, big picture way of seeing things. It may not necessarily protect you from a whole list of failures, but it will surely give you the morale t