Seven Dirty Little Secrets of Franchising
At any given moment, thousands of people across the world are thinking about buying a franchise business. Impressed by a business idea, or encouraged by a family member or friend, or possibly persuaded by a franchise broker, or dazzled by a franchise expo, a sizable percentage of these folks will buy a franchise opportunity with the hopes of achieving financial success, if not financial independence.
Good for them, except for those who will lose their money and may, in fact, ruin their lives financially and emotionally. Sadly, not all franchise investments turn out the way everyone involved had hoped at the time of signing the franchise agreement. Too many franchise investments go bottom up. It doesn’t need to end that way. Most times, in fact, it doesn’t end that way. Even if the franchise investors don’t become financially independent, or wildly wealthy, they achieve some degree of success, freeing themselves from jobs they hated, and building for themselves assets that they can one day sell.
So why do some franchise investments fail? Everyone involved in the process – the franchisor, the franchise advisors, the franchisor’s sales representatives – want the best for the new franchisee, but sometimes that’s just not enough. It’s not enough for everyone to be forthcoming, or for everyone to do proper due diligence, or for everyone to admit that certain circumstances may not be exactly as they need to be, or as they appear, for the franchisee to succeed.
That said, I don’t want you to reconsider your desire to buy a franchise, or your decision to buy one if you’ve already made it. Franchising is fabulously successful, and for most people, franchising is the only way they can succeed as business owners and operators. However, before you invest your money, which may indeed represent your life’s savings, you need to grasp the fact that all franchise investments do not succeed, but more of them could succeed if only the investor was better informed prior to the purchase.
And just to be sure that my position is clear, I believe most franchisors are honest; they want their franchisees to succeed, and succeed beyond everyone’s imagination. Think about what that success does for the franchisor’s ability to sell more franchises and build brand name value!
But at the same time, many franchisors, depending on the circumstances (e.g. how badly they need to sell a franchise), will intentionally withhold information that they are not legally required to divulge simply because they want to grow their network of franchisees. Of course, there are fraudulent franchisors who withhold information knowing full well that it will likely result in failure for their franchisees. In other cases, franchisors unintentionally withhold information that could make a difference to a franchisee’s performance as a business owner and operator.
What to do? It’s fairly simple. Before you buy a franchise, do your homework! Do the due diligence that’s required. It’s required of you! It’s not the franchisor’s responsibility to look out for your best interests. Even if a franchisor wanted to look out for your best interests, it’s not possible, because the franchisor will never know enough about you, and can’t know for certain how you’re going to perform as a franchisee until you become a franchisee. This is not about the franchisor!
American franchisors in particular are under intense scrutiny by regulators. They have been for years. They are required to comply with the most onerous franchise laws in any nation. They are required to disclose a couple dozen points of information about themselves and their businesses to help prospective franchisees make an informed investment decision.
7 Dirty Little Secrets of Franchising Description:
Seven Dirty Little Secrets of Franchising shows you how to take franchise due diligence, the explorative work that you must do before you buy a franchise (if you plan to succeed), to a new level of expertise. There are secrets that franchisors don’t want you to know; secrets that they are not legally required to disclose. Most prospective franchisees have no idea these secrets exist so they don’t ask about them, and that makes it all the easier for franchisors, franchise brokers, franchise consultants, and others who sell franchises, to stop short of revealing information that could kill the deal.
I’m all in favor of people buying franchises—I’ve devoted my career, through my books, blog articles, and seminars, to help people invest wisely in franchises. Now, that includes helping people pull back the covers on franchise opportunities to reveal the secrets that some franchisors want to conceal, either intentionally or unintentionally. But don’t get the wrong idea. This book isn’t about franchisors. Most franchisors are honest and they want to help their franchisees succeed. This book is about you! It’s about your ability to probe for facts and details that will help you make a wise investment in a franchise.
Franchising is fabulously successful and for many people it’s the only way they can succeed as business owners and operators. Now you have an even greater chance of reaching your business and financial goals as a franchisee by reading, and using, Seven Dirty Little Secrets of Franchising. Go pull back the covers!
