What Do I Need To Do Before Buying a Franchise?

Many franchisees sign a significant portion of their life savings over to open a business, and they do so because they are confident in the franchisor’s business model and their own ability to follow it. If they are smart, they have also retained legal counsel and consulted their loved ones.

Buying a franchise means becoming a business owner, and owning a business means liability. If you fail, your business fails. Franchisors can train and support you for success, but it will be you unlocking the doors each morning and running day-to-day operations, unless you hire a manager to do it in your stead.

If you’re interested in making the commitment, this checklist is a solid starting point:

• Have you had an attorney look over the paperwork?

• Do you have the required work experience to successfully run this business?

• Will the total investment for this business leave you cash-poor?

• Are you willing to work the required hours to make the business succeed? Even if this means missing important family events and working weekends?

• Have you interviewed other franchisees in the franchise system? Have they been candid with you? Did the franchisor make all of their franchisees available, or were some hidden?

• Can you live with the fee structure? Can you profit from it?

• Do you have an exit strategy? Can you resell the business?