America's #1 Franchise Directory, Trusted for Over 15 Years

8 Common Mistakes of Prospective Franchisees...

In this blog post you will find the 8 most regular mistakes incurred by prospective franchisees. Scan through the following list and make sure you keep them as a reminder of what you should avoid when preparing to invest in a franchise or business opportunity.

Some of them may sound like common sense but it is always the little things that you forget to take into account that can have huge consequences. So here goes, the 8 most common mistakes made by prospective franchisees …

Counting down…

stressed business manNumber 8:

Not budgeting accordingly for the finance of the franchise business. This includes not having enough working capital and not analyzing your financial resources. Be prepared for all business eventualities, by drawing up a business plan. This will help you keep track of your financial needs, outgoings and incomings…

Number 7:

Not understanding the UFOC (Uniform Franchise Offering Circular). This legal document is crucial to the understanding of the business you are interested in investing in. You should analyze this document carefully and with the aid of a reputable legal attorney.

Number 6:

Not understanding the Franchise Agreement. Before signing on the dotted line, you must understand the precise clauses within the franchise agreement and what it means for you and your business. Consider the clauses of the agreement with the aid of a legal attorney, to make sure you are getting the best deal for your franchise opportunity…

Number 5:

Not contacting enough franchisees. Contacting existing franchisees of the franchisor is crucial to assessing if the business system is worth investing in. You should contact the franchisor and ask for his/her franchisee details and record all conversations (oral or verbal) with them, to ensure you know this business will work for you…

Number 4:

Not asking why past franchisees have failed. This is a question many potential franchisees fail to ask a franchisor. Knowing why or how a past franchisee of the franchise network failed is central in assessing if you will be a successful franchisee or not. Always ask the franchisor these types of questions so you know exactly where you stand…

Number 3:

Not researching the franchise market prior to investing in a franchise. This is perhaps one of the most damaging mistakes of all top ten common mistakes made by franchisees. You should research the industry you are investing in thoroughly to make sure you understand the market conditions and potential profitability of your franchise operation…

Number 2:

Not seeking sound legal advice. As mentioned in Number 6 and Number 7, you should seek the legal advice of a specialized franchise attorney in understanding the terms and clauses of legal documents. If you do not understand the legal issues of the franchise, then you are really looking for trouble! Even if you understand a large majority of the legal documentation, always double check with an attorney to make sure you will be a franchise success…

Number 1:

Not meeting all Franchise personnel involved within the franchise network. If you want your business to succeed at its optimum level you will need the on-going support of key personnel working within the franchise network. Establishing good relationships with these people from the very start is vital to your long term success. Arrange an appointment to meet all personnel before signing on the dotted line…

If you would like more information on any of these key mistakes to avoid, post me a comment and I'll get back to you pronto...

P.S. Happy Valentine's Day to all my franchisee bloggers out there...hope its a special one...

Franchise Reporter

comments powered by Disqus

Your Request List

You can add items by clicking the "Add to Request List" button or checkbox when you find something you're interested in.

You may add up to 15 items to your Request List

Your request list will follow you around the site.

When you are ready to complete your request for free information, click "Submit" in your Request List.

Why not get started by browsing our New Franchise Opportunities or Low Cost Franchise Directory?

You may only enter 15 items in your Request List.

To request information from your selected companies, just fill in the form and click "Submit".

OK, got it

Request Info From:


Your List is Empty

You can add items by checking the "Request FREE Info" boxes.

* indicates required field

Optional Information

Join our mailing list!

We share your information only with your selected franchises.