Did you know that franchises make up over 10% of all businesses in the U.S.?
Whether you run a small business or get involved with a franchise, you need to work hard to avoid making serious mistakes that hinder your success.
Being successful in business franchising requires knowing what can stand in the way of progress. Keep reading to learn some common business franchising errors and how to avoid them.
Table of Contents
1. Not Hiring a Franchise Lawyer
With all of the legal documents involved in franchising, it’s in your best interest to hire a franchise lawyer to help you navigate all of the paperwork.
A franchise lawyer will explain all the legalese and make sure you don’t miss anything that might come back to bite you later.
2. Underestimating the Cost of Franchising
When you start a new franchise, it’s vital that you have the right financing and enough funding. You’ll have a lot of start-up costs and you’ll need the money to run the business for at least the first full year.
Many entrepreneurs secure funding through the combination of a Small Business Administration (SBA) loan with a Rollover for Business Startups (ROBS). This option allows you to invest your 401(k) without paying taxes or dealing with penalties.
3. Not Taking Advantage of Support From Franchisors
There’s such a large learning curve involved in business franchising strategy. When you decide to join a franchise program, you’d be foolish not to take advantage of the extra support of the franchisor.
You have a franchisor on your side who can offer you knowledge and experience to help you make a success of your business.
4. Don’t Realize the Importance of Your FDD
Your FDD or franchise development document should outline the franchise goals you hope to meet during the development process. It’s a very important piece of the setup process.
Don’t emulate another franchise’s FDD. What works for one franchise location may not work for yours. You need to figure out what will work best for your business in your location.
5. Lack of Strong Marketing
How do you learn of new businesses in your area? You probably notice their advertisements around town.
The same strategy works for franchises even though they’re backed by a strong brand. You need to develop a loyal following and customer base for your location.
Are you looking for a new dealership opportunity or wishing to expand your current business? This could be the solution for you. Learn more about this low-cost franchise and its high-profit margins.
Avoiding Business Franchising Errors
Now that you know the business franchising errors to avoid, you’ll have a better shot at success. You may want to seriously consider hiring a franchising consultant to assist in the launch of your franchise.
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Read More: Importance of a Quality Franchise Agreement