Making the decision to franchise a business is something that requires serious consideration and planning. After you make the decision to franchise your business there are certain mistakes a start-up franchisor should be aware of. Part of your preparation should include an understanding of the "mistakes" that other prospective franchisors have made. After you identify these mistakes the next step is to make sure you avoid them. Below are some of the common mistakes to avoid:
Failing to plan properly - As with many things in life, planning is critical. Too often "prospective franchisors" approach the "franchising" process with a "cookie cutter approach." That is, they jump into FDD preparation without consulting with a franchise lawyer who has taken the time to understand your business and has developed a clear multi-step franchise plan.
Failing to budget properly - Franchising a business requires a realistic as to the capital expenditure and cost required to properly establish a franchise system. A lack of budget planning can result in a failure to properly establish the key elements needed to create a successful franchise. Worse, without the right budget you may take shortcuts that could lead to costly litigation. So before you give a franchise lawyer the "go ahead" discuss with him or her your budget and obtain an understanding of the business and legal issues that will or may require the expenditure of capital.
Failure to be unique - When franchising a business a common mistake made is to copy what competitors in your market are doing. This is especially true when copying a franchisor who has taken short-cuts with its FDD preparation.
Failing to plan "sustainable growth" - Franchise growth is something that most franchisors strive for but when growth happens in an uncontrolled and unsustainable rate it is dangerous. When planning, consider that "slower growth" will assist with the development of a stable franchise system.
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and Charles N. Internicola, Esq. and that the information contained on this site does not and cannot serve as a replacement for the competent legal advice of a licensed attorney in your state. Further you acknowledge that any and all citations to cases and statutes must be independently verified by competent legal counsel to confirm the validity and accuracy of such information. The content of this site is subject to the Copyright of its author and owner, Charles N. Internicola, Esq.
