Biggest Issues Potential Franchisees Need To Consider

Guest post by: Anne Barr
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Transfers vs. New First Time Franchisees - By Anne Barr

What are the biggest issues potential franchisees need to consider before becoming part of a brand?

1. Willingness to follow a system for the length of the franchise agreement.

2. Willingness to pay royalties for the length of the franchise agreement.

Franchisees are very excited initially. They go through training, ramp up the business, and begin to successfully operate as a franchisee. Some franchisees, however, have a change of heart a few years into their agreements, especially if the agreement is a 10 year term. Ten years seems like a short time to some and a very long time to others. As a franchise consultant and business broker, I've visited with many existing franchisees who have decided to sell their businesses because they are just tired of paying those royalties! They feel the franchisor is making all the money. The royalties could be considered your "rent" paid to use the marks or brand name. As long as you use the marks or brand, you should expect to pay rent for the privilege. The agreement is for 10 years. What sometimes happens with first time franchisees or first time business owners is realization of the hard work and effort involved that they didn't expect. It's not exactly sitting behind a desk and taking that wheelbarrow of money to the bank every week!

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Transfers vs. New First Time Franchisees - By Anne Barr

About the Author: Anne Barr

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Anne Barr has over 32 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company.
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