Are you looking for a proven winner? Before looking any farther, here’s a list of 10 things you should and should not do as a potential franchisee.
The Top “Do’s”
- Appraise your experience, skills and likes to determine what business is a good fit.
- Decide whether to be in business full-time, part-time or with your family.
- Thoroughly investigate the industry first. If possible, work for someone else in the business first.
- Look to the economics of the business more than how well or poorly it has been run.
- Pursue a structured "due diligence" process. Ask for help from your lawyer and accountant.
- Perform your own evaluation of the business's real estate location.
- Deal only with established, well-financed and widely successful franchisers.
The Top “Don’t’s”
- Permit any expert to decide for you whether or not you should buy a business.
- Buy a business or franchise without your lawyer approving all documents.
- Rely on pro-forma financial statements (future predictions.)
- Be in a rush. (Wait patiently for the fat opportunity by looking at lots of them.)
- Rely on the seller's evaluation of inventory and other assets.
- Hesitate to walk away from a deal that is not a potential home run.
- Overlook comparing what you can do as an individual vs. as a franchisee.
