Buying a franchise is quite a big commitment. You need consider quite a lot of factors such as your personal situation, availability of time & capital, your skills, and many others.

The biggest mistake you can make is selecting a franchise simply based on your ‘gut feeling’ without doing some serious number crunching and market research 1st. Many buyers we have encountered have been lured into business opportunities with a large financial commitment, just to find their dreams shattered.

In most of these cases there was no malice or negligence involved on the part of the franchisor, but rather a series of poor decisions that ended with a poorly located franchise, misguided product choices, or in some cases even personal bankruptcy.

You must look at:

Your own financial solvency. Are you able to sustain a period of little or no income while paying off a loan & paying yourstaff?
Your existing financial commitments, such as a mortgage, car loan, student loan etc.
Your skills set. Do you have the personal skills required for your selected franchise? If you choose a business services, without any previous business experience – you may feel like a fish out of water.
The location of your new business. Does it suit the service you are promoting?
The track record & profits of other franchisees in the chain. The bottom line is the bottom line here, and if others in the same industry are not performing well – you may be better off with a more proven formula.

The sad reality is that the majority of businesses fail or change ownership within the 1st year. This is not the case with most franchise options. The experience and guidance provided by the franchisor gives the franchisee a distinct advantage. Having decades of well researched data at your disposal will save you making quite a few costly mistakes, and can surprise even the most sceptical business advisor!

There have been many cases of franchise “newbies” who follow the advice of their mentors and manage attract over $1m in turnover in the 1st year, and keeping a significant profit %.

Many use the experience gained in opening their 1st franchise to open additional businesses both within the franchise group and separate to it.

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