Considering opening a new franchise? You’re not alone. Franchise ownership is hot for a lot of reasons. You get to be your own boss, giving you more freedom and flexibility in your career. You also get a valuable head start when beginning your new venture because much of the market research, marketing and setup have already been done for you.
Owning a franchise is exciting. Still, there are certain guidelines you should follow when opening a new business. Here are five of the most common mistakes new franchise owners make and how you can avoid them.
#1. Not Being Comfortable With Limited Decision Making
One of the biggest benefits to opening a franchise is that so much of the work has been done for you. For new franchise owners hoping to forge a new path, this can be a catalyst to a lot of mistake-making.
Many decisions will be made for you already. Get comfortable with that idea. Don’t try to shake up the industry with something revolutionary. You’re in this because you have a proven business model that will support your success going forward. Embrace it and leave the decision making to corporate.
#2. Not Talking to Other Franchisees
Another common mistake is getting seduced by attractive numbers and industry reports. Sure, there are many franchises out there that are thriving, but is yours?
Go the extra mile to research a franchise before you open it. Do your due diligence by talking to other people who own the franchise you’re considering opening. You might even want to work in the franchise for some time to get familiar with the daily operations and get a true behind-the-scenes glimpse.
#3. Not Hiring a Franchise Attorney When Signing a Contract
Contracts are complex. You’re not expected to know all of the legalese and technical jargon associated with these important documents. An attorney is.
Hire a franchise attorney before you sign any documents. Don’t assume that because so many other franchise owners have had success with the contract, you will too. You should understand exactly what you’re agreeing to before you open your doors.
#4. Understand the Payment Plan
One of the biggest confusions franchisees have is how the franchisor will get paid. Many assume the franchisor will not take a portion of the sales if the business is not profitable overall. This is most oftentimes wrong.
Research and get a better understanding of how much your franchisor will take each month. Use this to calculate your expenses so you can better gauge how much you have to work within your budget.
#5. Not Researching Online
There are a wealth of resources available to people considering buying a franchise and new franchise owners. Without researching feedback from other franchisees and details about the franchisor online, you’re missing a piece of a very important puzzle.
Don’t Make These Mistakes
These are easy mistakes to avoid as long as you know what they are. The bottom line is, research matters. Don’t assume you know what it’s like to own a specific franchise. Going the extra mile before opening your doors will help you sleep better at night knowing you chose the best franchise for you.