Why You Should Research Franchise Opportunities Jun 18, 2021
There are lots of franchise opportunities available. However, before you start deciding between them, you should be very clear on what you really want in a franchise. For example:
- What is your primary reason for starting a franchise business ? e.g.
- to earn a living;
- to learn;
- for the challenge; or
- to use existing skills?
- What industry do you want the franchise to be in?
- Will it be seasonal, eight hours a day or 24/7?
- When do you want to start the franchise?
- What kind of risks can you tolerate?
- How much money do you have to invest?
- What kind of lifestyle do you want?
Understanding some of the risks of a Franchise Model
Franchising has its pitfalls like any other business model. However, there are heightened risks in the reliance a Franchisee may have on the Franchisor.
For example, some of these risks include:
- Franchisors putting undue pressure on potential franchisees including to quickly sign agreements;
- Franchisors improperly making or withholding critical financial, operating and performance information;
- Franchisors inappropriately using confidentiality agreements to withhold critical information to franchisees;
- Franchisors promising certain levels or amounts of profit to be made by the new franchise;
- Franchisors who renege on their promises, thereby compromising the already operating franchisees; or
- Franchise brokers misrepresenting information about their roles and making improper recommendations about which franchises to buy.