At Anchor Business Brokers, we often see the same inevitable mistakes that first-time franchisees make over and over again. You can avoid pitfalls and save money by learning a few key tips and implementing them before you make a purchase.
7 First-Time Franchise Buyer Tips
- Seek a franchise that’s ideal for your skills, in a location with which you’re familiar and where demand exists. A franchise won’t run itself. You’ll need to assess your abilities and seek help if you identify any gaps in your knowledge base. Serious managerial, customer-service, and operational skills are required. You should also have a background in the specific franchise’s industry.
- Don’t rush into your decision. Those pretty, shiny brochures look great, but don’t often paint an accurate picture. Give yourself at least three months for investigation, including touring several franchise locations. During this time, make a list of questions that come to mind and start building a sound business plan.
- Avoid sales pressure: You’ll get all kinds of lines, including that the franchise probably won’t be on the market in the coming week. Don’t fall for it. They may also promise exclusivity or limited-time offers (that often lack an end date). These tactics entice you to sign before you take step 4 – due diligence.
- Due diligence: Franchises are expensive, and there are also hidden costs associated with them. Conduct thorough research and ensure you have sufficient working capital. Keep your profit expectations reasonable and ensure you account for marketing expenses and other fees to have sufficient financing.
- Details: Our experts at Anchor Business Brokers strongly advise carefully reviewing all documents. Get a legal review of the disclosure document and the franchise agreement.
Why? The disclosure document contains key details that can reveal matters that may impact your bottom line or the way you must operate the franchise. The franchise agreement (some 200 pages long) includes information about renewal and other conditions that you must abide by for years to come. - Talk to other franchises: You have people with feet on the ground who can tell you the nitty-gritty that you might not get elsewhere. Ask questions like how long they were in operation before turning a profit, and were there any unexpected costs.
- Location: Choosing the wrong locations can end a franchise before it even begins. You want an area with good traffic patterns and adequate parking. Look around to see what competition exists and how close they are to your potential site. Finally, research the demographics. You want to target your franchise to the right market audience.
Work With Anchor Market Business Brokers
Anchor Business Brokers takes pride in having a highly experienced team of professionals that can help you buy a franchise in Florida. We begin by working with you to refine your goal. At the end, we helped negotiate the final sale. Our ultimate goal is to provide you with the best possible investment value.
If you’re looking for a franchise in Florida, we’d love to hear from you. Give us a call at 561-995-9906. Alternatively, you can email us at info@anchorbb.com or use our online contact form.