When buying a franchise, you might feel that all the work has already been done. The franchisor came up with the concept, the systems, and the marketing. What’s left for you to do? Actually, the franchisee still has many tasks. The first one is to avoid the following common franchisee mistakes.
Failing to Do Your Homework
It’s crucial to research franchise opportunities before settling on one that works for you. In addition to researching industries and markets, try to talk to a few current franchisees. They may provide insight that helps you decide whether the franchise is right for you or not.
Ignoring Your Business Plan
Franchisees already have a structure, that’s true. But preparing your own business plan can help clarify your thoughts about operating the franchise. You can include a vision statement or mission statement, then refer back to it often to make sure you are still on track.
Trying to Do it All
Franchisees tend to have independent spirits. However, one of the common franchisee mistakes is trying to do it all yourself. Make sure you add professionals to your team as soon as possible. For example, you need an attorney with franchise experience to help you avoid franchise agreement pitfalls. You could also round out your team with at least one financial advisor. Depending on the franchise, experienced marketing professionals might be helpful.
Undercapitalizing Your Franchise Is a Common Franchisee Mistake
Make sure your venture has enough financing in place. It’s critical to have enough money to get your business started and weather any storms that come your way. Getting favorable terms for your franchise is also important.
Failing to Take Advantage of Franchisor Support Is a Mistake
This may fall into the “don’t reinvent the wheel” category. Most, if not all, franchises have already worked out operations, training, supply chains, and marketing. Some people make the common franchisee mistake of ignoring the franchisor’s support systems because they want to do things their own way. While there may be room for some creative differences, at least consider using free support from your franchisor. In fact, some franchise agreements may require franchisees to do so.
Last on the List of Common Franchisee Mistakes: Signing Your Franchise Agreement Without a Legal Representation
Franchise agreements are legally binding contracts. You will be bound by the terms in the agreement, whether you understand the legal consequences or not. As with all contracts, we encourage you to never sign without having your attorney or corporate counsel review it first.
An Experienced Business Lawyer Can Help You Avoid These Common Franchisee Mistakes
It’s just not possible to know everything about starting and running a franchise. Legal issues are particularly important because the consequences of ignoring them can be devastating to your business venture.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.