Pre-Purchase Franchise Due Diligence is a Must
One would assume that a high percentage of people buying a franchise would conduct proper pre-purchase franchise due diligence and even obtain professional advice before making the purchase, but that’s not so.
First, most prospective franchisees are not experienced business people. They are venturing into entrepreneurship for the first time and therefore, are susceptible to all types of danger. Like anything else, if a person is new at something, they can be easily fooled or misled. Franchise sales people and brokers have a very powerful hold on buyers from the perspectives of sales experience and knowledge.
Second, and this is the really unfortunate thing, a prospective franchisee’s dreams and enthusiasm can easily be more powerful than the facts right before them. Why? Because they can, and often do, choose to overlook the facts. The dream and the salesman’s talk are just too wonderful to pass up. And that’s the simple reason why such a small percentage of buyers do the required homework and take advantage of real franchise due diligence services. You’ll find that less than one half of franchise owners read or understood what they purchased until long after they joined a franchise system. Entrepreneurship is not a game; it’s reality, but often the mind doesn’t blend with reality.
Third, and worst of all, obtaining professional pre-purchase due diligence services are readily available and the cost absolutely pales in comparison to making an uninformed decision. Question one should always be ‘should I really be self employed?’ And question two should be ‘what type of business might be best for me?’ Those can be addressed in a variety of ways, but The Focus Program for Emerging Entrepreneurs is a great starting place. After that, competent legal, investigative and financial help is there for the asking. Don’t leave due diligence until after the fact.