If you are a hard-working employee, you may be tired of putting more money in your employer’s pocket and less in your own. On the other hand, perhaps recent world events have resulted in a layoff or job loss that has you reevaluating your direction in life. You may be considering the possibility of starting your own business. However, these are challenging times, and taking great risks may not seem appealing to you or to your family.
Many in your situation look at the option of buying a franchise as a way to establish themselves as entrepreneurs. While buying a franchise often means jumping right into a business venture that is already tried and proven, you should also be aware of some of the drawbacks of going this route. Franchising may be ideal for some, but it is not the right fit for everyone.
The benefits of a franchise
Franchises exist for many markets beyond fast food. In fact, some of the most popular franchise opportunities involve fitness and beauty, home and garden care, educational services, and pet needs. If a franchise is right for you, it should be easy for you to find an industry that fits your interests and business style. Additionally, you will have the benefits of bypassing the difficult stages of preparing a business plan and the tedious work of market research. A franchise already has a working system in place.
Do your homework
Despite brand recognition, training and the support of your franchisor for marketing and supplies, you will want to seriously consider the potential disadvantages of buying into a franchise, for example:
- Expensive initial investment and high royalty fees for some franchises
- Limited opportunity for creative thinking or experimental strategies
- Intense financial oversight from the franchisor, which may mean a lack of financial privacy
- Restrictive rules that limit your flexibility, even if you have a better way of running the day-to-day operations
- Trickle-down effect if the national franchise suffers damage to its reputation
- Complex contracts that may leave you responsible for certain expenses
In fact, contracts for franchises can be quite complicated. Without a careful reading, you may find yourself stuck with expenses or demands you are not prepared to meet. If you are considering buying a franchise, it is wise to do extensive investigation into its history, reputation and financial well-being. You may also benefit from a careful review of the franchise contract with an experienced Georgia attorney who can advise you of your best options, assist you in negotiating the terms and support you throughout the life of your franchise contract.
