There Are No Guarantees In Franchising | Franchise Law Blog

In Business There Are No Guarantees and, Yes, Franchises Do Fail

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Every once and a while I get comments to posts on this blog that I refuse to publish.  These are not comments that are critical of my posts  (frankly, I appreciate critical comments that offer informative and different viewpoints) but rather generalized comments by individuals who are just looking to attract attention to a franchise or business opportunity that he or she is attempting to sell.

What bothers me the most is that these comments almost always involve an erroneous (and almost fraudulent) sales pitch where the prospective business purchaser or franchisee is advised basically, that franchises don’t fail.  These improper and erroneous sales pitches, incorporate the following theme:

“During tough economic times you should buy a ______________ franchise because the chances for failure are much lower with a _________ franchise than starting a business from scratch because you will benefit from a proven system.”

While there are many benefits to franchising (benefits that I value and believe in) the reality is that, like any business, franchises do fail and that not every franchise opportunity is the same.  That is, there are many franchisors that possess neither a proven track record nor a tested business model. The key for the prospective business purchaser and franchisee is to find the right business model for you and, when purchasing a franchise, to be selective and find the right franchisor, that is a franchisor with a tested and well established model.

Good franchisor’s are out there but you must do your research, speak with qualified franchise advisors (they are out there) and consult with a franchise lawyer to review the FDD and other information before you signing any agreement or pay any money.

The information is out there, but you must be an active purchaser and discount sales pitches that guarantee success. In business there are no guarantees.

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Date: 10/06/2015 | Category: Buy a Franchise

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