Investing in a franchise can be fruitful opportunity for you as an aspiring business owner. By sticking to the following do’s and don’ts when buying a franchise, you can set yourself up for a long and successful career in business.
Do — Secure financing before signing a contract or lease Whether you already have the funds or are considering a loan or other type of financing, make sure you know the total costs to open a franchise and how you’ll support those costs before jumping in.
Don’t — Opt for the first loan offer you receive Shop around and weigh your options to choose the financing that’s the best fit for your business. Several online tools are available, including calculators that determine expected monthly and annual payments.
Do — Develop a business plan Before you make any decisions or sign paperwork, develop a detailed business plan that can serve as an overall blueprint for your dream business, goals and what is required for your franchise to be successful.
Don’t — Go it alone If you’re passionate about opening a franchise, don’t go it alone. Surround yourself with a team of experts to assist, including a lawyer, accountant, business partner, fellow franchisees, and more.
Do — Look over the franchise contract with a lawyer Work alongside a lawyer who is well-versed in franchise requirements to review and negotiate the contract. Some franchises have strict requirements, including getting locked into a long-term contract or paying a set amount of money to the franchisor each month no matter your level of success. Have your lawyer go through the contract with a fine-toothed comb to catch any of these requirements.
Don’t — Overlook the competition Take a look at the local market(s) where you plan on opening a franchise location to understand the demographics and competitive landscape. Is there an opportunity for your franchise to be successful in a specific market or will it likely see success at a different location?