Franchising Has Risks Like Any Business, As Well As Rewards

Some folks go overboard when it comes to their views of the franchise model. Now, do not get me wrong, I too believe that the franchising model is perhaps the very best business model ever conceived, yet at the same time having participated a bit in the industry, I also realize that not every franchise company or franchising corporation is created equally.

Indeed, not every franchise business opportunity for sale is worth its hype and you cannot tell just based on the franchise fees, and offering alone. You must do “due diligence” and I am sure I am not the only one to tell you this, but it’s a must. When I say due diligence, I mean in-depth investigation, including but certainly not limited to contacting current franchisees, and reviewing the disclosure documents with a fine tooth comb.

Still, even with all the Trips and Traps in Franchising, it would be hard to refute the advantages of the franchising business model. By the way; there is a very good franchise book by that title, one I often recommend for students studying franchising or for serious franchise buyers.

If you are careful, franchising can be a totally positive, and rewarding experiences but you cannot become complacent during the sales process, as once you commit, you are in it for the length of the term stipulated in the franchise agreement. Despite what some people think, franchised outlets do fail, no, it’s not as bad as the failure rates of other small businesses, but you should understand the risks as well as the rewards. Think on this.

Source by Lance Winslow