Embarking on the journey of becoming a franchise owner is an exciting yet daunting prospect. For first-time entrepreneurs, diving into the world of franchising requires a comprehensive understanding of what goes into a successful franchise investment. The cornerstone of making an informed decision is conducting due diligence. Here’s a step-by-step guide to help you navigate
A business owner walks in with a pitch. He wants to “sell” you a piece of his company. The idea sounds solid. The opportunity feels right. You shake hands, cut the check, and walk away thinking you just became a business owner.
Then reality hits.
Nothing is in writing. No contract. No terms. No guarantees.
Buying a franchise will cost you more than the high end of the investment range disclosed in the Franchise Disclosure Document (FDD).
Let me explain.
Buying a franchise is a major financial decision. It is not just about covering the initial franchise fee and build-out costs. To set yourself up for success, you need to
Not all franchise opportunities are worth the risk.
Franchising has become a popular path to financial independence, promising a proven business model and support from an established brand. With over 15,000 new franchise units expected to open annually, it is easy to get swept up in the excitement of becoming your own boss. However, not
Franchising is booming.
Private equity firms are snapping up franchisors faster than ever. Recently, we have seen Jersey Mike’s secure a massive $8 billion private equity deal and Freddy’s Frozen Custard and Steakburgers now reportedly exploring a sale. The stakes are high, the money is flowing, and the pace of change is staggering.
But
I recently took a call from someone eager to buy a restaurant franchise.
They were excited, optimistic, and ready to take the plunge. The idea of owning their own business, working for themselves, and controlling their destiny had them fired up. They had done some research, run the numbers, and figured they were ready to
In an era of increasing sophistication in scams, fraudsters have found a new tactic: exploiting real business names and lawyer identities, likely scraped from Secretary of State websites or public records, to bolster their credibility. This scheme not only tarnishes reputations but also endangers unsuspecting victims who may unknowingly engage in fraudulent dealings.
I recently
A client recently asked for my thoughts on a new franchise they are considering.
When it comes to franchising, there is a unique allure to being one of the first. You imagine the chance to “get in on the ground floor,” to ride the wave of a promising new concept. But investing in a new
Exiting a failing franchise is not easy.
When a franchise struggles to deliver expected returns, franchisees often wonder if they can negotiate an exit from their ongoing obligations, especially the requirement to continue paying royalties. Franchise agreements are complex, one-sided documents that make severing ties without repercussions challenging. Many franchisees quickly discover that the
Continuing royalty payments after termination are often an overlooked financial trap in a franchise agreement.
When you sign the deal, you agree to pay franchise royalties as part of the agreement. But what most franchisees do not realize is that these payments can continue even after termination of the agreement. This leaves you financially exposed
