Purchasing a franchise is an exciting opportunity that can lead to financial success — as long as you go about it the right way! If you avoid a few common pitfalls, you may have a better chance of making the right investment and growing your franchise business. To provide you with some guidance, our team at Franchise Legal Support has provided a list of some of the most common mistakes made by prospective and new franchisees.
Here are the key franchisee mistakes to avoid:
- Failing to fully understand all the legal paperwork, including the disclosure document and franchisee agreement
- Failing to consult with an experienced attorney before signing the dotted lines
- Failing to do enough research on the franchisor and its business (the business model, the company’s history of performance, past legal issues, etc.)
- Failing to properly research your local market, which is crucial for choosing the right location and gaining the right customer base
- Failing to talk to other franchisees to learn about their successes, failures, issues of concern, and overall experience working with the franchisor
- Failing to collect enough funding for the investment or underestimating the future costs of running the franchise
- Overestimating about how much independence one will have as a franchisee (failing to realize the various business factors that are actually controlled by the franchisee)
When it comes to investing in a franchise, it all boils down to doing your due diligence and making informed decisions. In addition to doing your own research, you should also make sure to consult with an attorney who truly understands the franchising industry.
At Franchise Legal Support, we can help you understand the franchise model and review all the paperwork, including your disclosure document and franchise agreement. We can also represent you in all franchise-related negotiations both now and in the future! Call our office to learn more about how our Los Angeles franchise attorney can assist you.