6 risks to think about before buying a franchise
Starting a business can be risky, and buying a good franchise can be an effective way of minimising the risk. However, there is still a substantial amount of risk involved in purchasing a franchise, and there are a number of very important things you need to understand before you commit.
1. You are not the master of your own destiny.
You have to follow the franchisor’s rules and procedures, buy from them or their specified suppliers, and do things their way, which means that effectively, the franchisor is very much in control. Of course, if the franchisor’s business is stupendously successful, you wouldn’t worry about that. Isn’t that why you are interested in buying the franchise? On the other hand, if the franchisor’s business is a dud, or if you are entrepreneurial, being trapped in a franchise is not going to be much fun.