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Biggest Issues Potential Franchisees Need To Consider

Guest post by: Anne Barr

Article Overview: This article discusses the two biggest issues potential franchisees should consider before becoming a part of a franchise brand.

Biggest Issues Potential Franchisees Need To Consider

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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Article Tags: franchise ownership, franchisee questions



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