Whether you have made it your New Year’s resolution to buy a franchise or you have been planning to leave your job for years and are finally ready to take the plunge, there are some important facts you need to know if you are planning to buy a franchise in 2020. Here are five tips from franchise attorney Jeffrey Goldstein:
Tip #1: Do Your Research
There are more franchise opportunities available today than at any prior point in history. While several concepts that were “emerging” just a decade ago are now firmly entrenched among the industry’s leaders, there are many untested concepts out there, and franchisors’ reputations can shift dramatically in a very short period of time. So, before you settle on one particular franchise, make sure you do your research.
Tip #2: Choose a Franchise Concept with Staying Power
In the same vein, when buying a franchise, it is important to choose a concept with staying power. What we mean by this is that you need to try to avoid buying a fad franchise. You will be investing a lot of time and money in your new business, so you need to be reasonably confident that there will be adequate consumer demand throughout the duration of your franchise agreement.
Tip #3: Focus on Technology
In recent years, technology has changed the way that many franchise systems operate, and Forbes.com recently published an article on how technology will transform life as a franchisee in 2020. When you are buying a franchise, it is important to ensure that you have a clear understanding of the technology you will be required to use – and when (and to what extent) the franchisor can require you to adapt to new innovations at your own expense.
Tip #4: Be Prepared for the Buying Process to Take Time
Buying a franchise takes time; and, after the adrenaline of visiting the franchisor’s headquarters and signing the receipt for your franchise disclosure document (FDD) wears off, you will still have the majority of the process left to complete. So, it is important to prepare yourself for what is to come and have a systematic plan for reviewing the franchisor’s documentation and conducting your due diligence.
Tip #5: Read the Franchise Disclosure Document (FDD)
The FDD is long. It is dense. No one wants to read it, and many franchisees don’t. But, this can be a costly mistake that can lead to many unhappy surprises down the line. The FDD contains a lot of important information about everything from ongoing fees (that won’t be mentioned in the franchisor’s advertising materials) to operational requirements (like mandatory purchasing obligations), and all of this information is critical to making a smart buying decision.
Learn About Our Fixed-Fee Franchise Business Reviews for Prospective Franchisees
Franchise attorney Jeffrey Goldstein has over 30 years of experience helping prospective franchisees make smart buying decisions. If you are thinking about buying a franchise in 2020, call 202-293-3947 or request a free consultation online to learn more about our fixed-fee business review programs.