How to avoid a let-down when you buy a franchise

By | |

After a franchise buyer's initial euphoria, the reality of the day to day business sets in. So it's important for new franchisees to start off confident in their brand choice to avoid slipping down the slope to disappointment.

There are many successful franchise systems that act responsibly and support their franchisees. Franchisors have a vested interest in their business, staff training, research and development and look at ways to improve their system for the benefit of the brand, their consumers and their franchisees.

However, for a variety of reasons, franchisees may have entered into a franchise system and become disillusioned. They may:

  • have bought the wrong franchise
  • have believed the hype
  • have discovered the business is not for them, they actually don’t like the work and it’s not what they expected
  • have failed to objectively assess whether there is a financial return on their effort and investment
  • not be prepared to be held accountable and follow the system
  • have changes to personal or financial circumstances since becoming a franchisee due to health, family or other reasons.

Franchise buyers need to ask the right questions

There are some fundamental questions a franchisee should ask themselves, before committing to a franchise.

  • is there a financial return on my effort? Can I take out a reasonable salary for my effort? If not – walk away.
  • is the business sustainable or a passing fad?
  • am I likely to have something of value to sell in the future?
  • can I see the brand and business building goodwill?

There is no franchise or business where returns are made without effort, dedication and commitment.

If it is too good to be true – guess what? It is!


Robert Toth

Robert Toth is franchise partner at Marsh & Maher Richmond Bennison. Robert is a Business Law Accredited Specialist, a member of the International Franchise Lawyers Association (IFLA), and a member of the Australian Institute of Company Directors. View More...
My shortlist (0 item)
    Back to Top