Pre-Purchase Franchise Due Diligence is a Must
One would assume that people buying a franchise would conduct proper pre-purchase franchise due diligence, but that’s not the case.
First, most prospective franchisees lack previous business experience. They’re 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, 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. That dream plus a salesman’s pitch can be just too powerful to resist. From our years of experience, we’ve found that far less than one half of franchise owners read or understood what they purchased until long after they joined a franchise system. That a disturbing fact. And it can be easily rectified through proper due diligence.
Third, and worst of all, 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.