Want To Buy A Franchise? First Get A Reality Check

When the decision is made internally to 'go forward' with buying a franchise, people sometimes get way ahead of themselves and they want to get going NOW! I get it. We're entrepreneurs and we don't wait around for others to tell us what to do.

Fact is most mistakes will be made during this time period. It's important to stop, take a deep breath and resist the urge of our 'microwave society' to have it fast and have it now. In this article, I'm going to give you 4 things to consider before buying a franchise.

1. Don't rush and choose wisely - It's crucial to do you due diligence before you make the decision to buy a franchise. It's important to think about how much money you have to invest, what your capabilities are in running a business and your overall goals. However, one of the most common mistakes entrepreneurs make is they never make a plan on what they want to accomplish. Well, you know the story, but if you 'fail to plan, you plan to fail!'

2. Be informed - Far too often many 'newbie' franchise buyers jump right into buying a franchise without any knowledge of the in's and out's of franchise relationships nor do they understand the viability of the industry they are choosing. They don't do enough research on the company they're looking at and they don't understand the legal consequences of the contract they are signing. It's a good idea to get to know the leadership of the franchise. Find out who they are and understand what they believe in. Scrutinize their 'franchise culture' because having the right culture is EVERYTHING!

3. Consult with experts - Signing the FDD and franchise agreement is serious business so stop for a minute and consult with a franchise attorney or franchise expert to see if owning a franchise is right for you. Taking this step could save you from expensive situations down the road with expensive litigation. You should be also talking with your accountant so you understand all the business ramifications of owning a franchise. Know what the tax advantages and disadvantages are.

4. Understand the FDD - The FDD is a legal document outlining the franchise agreement. In this agreement, you won't get what you deserve or what's fair. Nope. You get what you negotiate. You can either retain legal counsel to negotiate on your behalf or you can negotiate directly with the company yourself. It's entirely up to you. The FDD is filled with all the essential information you need to understand everything about what you're getting in to. Furthermore, the FDD will disclose all litigation and pending litigation against the company. The FDD is 'full disclosure'. By law, you have 14 days to review the FDD before any monies can be exchanged for the purchase of the franchise. Use those 14 days wisely and do your due diligence.

By the way, do you want to learn more about franchising so you can make educated decisions about finding the right franchise for you?

If so, download my free guide here: The Franchising Insiders Report

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If so, I suggest you check out: BizziBiz Franchise