Starting a franchise business offers many benefits, and the association with a reputable brand is one. However, not all franchises are made equally. Check out these franchise red flags so you can spot the brands you don’t want to be associated with.
A Director’s Dodgy Background
Do your research into the people behind the franchise. A surprisingly high amount of people who start franchise companies have a poor record of personal finances and even criminal backgrounds.
Unsustainable Fast Growth
Fast growth can seem very appealing, but it’s often a red flag. A franchise that has seen very rapid growth may not be able to effectively sustain and support all franchisees. A good franchise company will have gone through proper routes to get started and when they decided to ‘franchise my business’, they would have sought proper consultation from experts such as ashtonsfranchise.com/franchise-my-business.
Lack of Sales Realism
A franchise company that promises to make you millions in a year is likely unrealistic about sales. Not only is this misleading, but it says a lot about how they do business generally. Choose a franchise company that makes realistic predictions about your franchise opportunity.
Poor Communication with other Franchisees
What does the franchise offer in terms of networking and communicating with the other franchises? If you get the impression this isn’t encouraged, then it’s a big red flag. A good franchise operation will encourage franchisees to communicate and support one another, if not, they likely have something to hide. Be sure to ask important questions about communication before you make a commitment.
Compatibility
A franchise should be a match made in heaven. Not only should you ensure the model works for you, but a good franchise operation will ensure you meet their own standards and requirements too. If they seem all too happy to take your money without checking for compatibility, this is a major warning sign.
Starting a franchise can be an exciting journey, but shouldn’t be taken lightly. These five red flags should alert you to a poor franchise operation well before you sign on the dotted line.
