It can be pretty intense to invest in a franchise.
First, there’s the money.
“What if I lose everything!!?”
Then there’s the internal pressure.
“I can’t fail…I can’t fail…“
To say nothing of the external pressure.
“Honey, I hope you know what you’re doing. Please don’t screw this up.”
Plus there’s that back and forth going on inside your head.
“I sure hope I picked the right franchise. What if I chose the wrong franchise?”
Good thing there’s a checklist you can use before you write a check to franchise business headquarters.
In this case, a checklist that will help you determine if you’ve done everything you need to do before you invest. A checklist that will help you lower your risk.
Use This 10-Step Checklist Before You Invest In A Franchise
Here you go!
- Have you learned all you can about the franchise concept?
- Do you feel that all of your questions were answered by corporate?
- Did you get enough insights from the franchisees?
- Did you attend a in-person or virtual Discovery Day at franchise headquarters?
- Did your Discovery Day provide you with enough information on the company, its culture, and its support structure? Do you trust the executives?
- Have you looked at a couple of different financing alternatives?
- Did you seek out and meet with a franchise attorney?
- Do you have money in place to live on* (household expenses) for 6-12 months-during the lean times of your franchise business start-up period?
- Have you thought about a worst-case scenario? What if your business fails? How much money will you lose? Can you recover?
- Are you ready to put in the hours necessary to be successful?
*“If you’re used to working for someone else, that means you’re used to getting a steady paycheck. (Or if you were in sales, a fairly steady paycheck!) I feel that the most difficult part of transitioning from an employee to a small business owner is that you will not be getting a steady paycheck. As a matter of fact, the 1st year in your franchise business may not yield you a paycheck of any size. This is why I always recommend that you have some funds set aside for your household expenses. Building a small business means that you are starting at zero and it’s hopefully uphill from there. I feel that it’s worth the short term financial pain.” – From an article I wrote for American Express
Franchise Tip: Small Business Loans Require A Business Plan For Approval!
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Have You Done The Work?
That’s what this post is really about. The work.
Because you wouldn’t believe how many franchise buyers don’t do the work. How many skip even the most basic parts of investing in a franchise. .
For example, did you know that there are people buying franchises right now…people signing 10 year franchise agreements, who aren’t having a franchise attorney look them over? Why would a potential franchise owner do that?
Because some franchise sales representatives tell prospective franchisees that “You can hire an attorney if you want, but it’s not like they’ll be able to change anything in the franchise agreement.”
(Comedian, Sebastian Maniscalco)
Don’t fall for it! It doesn’t matter if anything can be changed in your franchise agreement!
That’s because the main reason you hire a franchise attorney is to protect yourself. And that includes a detailed review of the 300-page Franchise Disclosure Document (FDD), and the franchise agreement. Why?
So you have a complete understanding of the terms of the agreement, including what the franchisor is responsible for and what you are-as a franchisee. Plus, do you really want to pour over pages and pages of legal terms, some of which only a lawyer can understand?
Lastly-and this is important, there’s a myth about franchise agreements that’s been floating around for years, and 3 top franchise attorneys just debunked it. (Important read)
Make A Commitment Now
I want you to make a commitment right now…before you sign a franchise agreement, before you take your checkbook out to invest in a franchise, to use the checklist I created above.
Then, if you still have questions, if you still aren’t 100% of the way there, I want you to schedule a complimentary call with me. Why?
Because buying a franchise is a big deal.
Business Tip: You Need To Get Business Owners Policy Insurance