Essential Knowledge Before Buying a Franchise
The decision of buying a franchise is not an easy one to make and this article hopes to offer you some information that will make things just a little bit less confusing.
Before going into franchising make sure you do your homework. Carefully research the possibilities available to you and consider all the aspects of this situation which can be the ultimate turning point of your professional life.
Franchises are all over the place now. They’re in your favorite supermarkets, restaurants and your regularly used means of transportation. They’ve shown a remarkable growth over the past few years with an annual rate of growth exceeding 50 %.
As a result, the competition amongst new franchisees is intensely fierce. You have to be unwavering in your decision before signing the franchising contract because it’s an uphill climb and you have to understand what you’re getting yourself into.
The choices are abundant and disparate ranging from foods to cosmetics. Make sure your choice is something that you’re even remotely experienced in so that your preexisting interest and acquired skills can give you an edge ahead of the competition.
Educate yourself by attending seminars and training courses. Get your hands on all he information you can obtain. There are details you must think through extensively such as franchise, promotion, location and training fees.
Before selecting a franchiser, learn about his or her company. Understand what type of support it offers and how its history holds up under scrutiny. Check the success rate of their franchisees past and present and read your contract carefully to understand your rights. Understand how earnings will be distributed and your share of them.
Keep in mind that success is not always guaranteed even when dealing with a very successful franchising company. Don’t expect to become a millionaire overnight either. Your franchising business may not be as successful as you desire until years of hard work have passed.
Carefully consider your costs and understand your financial obligations. Look at the best means to obtain loans and borrow money.
Be careful to stay within the boundaries of your contract. Guidelines are there for a reason and any breech may lead to the termination of your business agreement when you’re just getting started.
Last but not least, don’t shy away from legal assistance and seek it before you put your signature on anything.
Filed under: Buying a franchise, Franchise Articles
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When we recently purchased a Prestige Nursing franchise in the UK, we did all the essential research that was recommended. We spoke to franchisees, had a professional finance person draw up the financial projections, had it vetted by the bank for a loan. We were told that the franchiser was a reputable reliable one with a strong name in the industry. when however we got involved we started finding out that whereas the franchisees all said they were happy, before we joined, we found out afterwards that some of them were really unhappy. We also discovered that the start up costs described by the financial plan was way out of sinc with reality, so much so in fact that we decided to pull out. After much unpleasantness and losing a lot of money we eventually divested ourselves of this franchise. My point is……be very very careful.