Potential franchisees who think this is a slam-dunk way of doing business have been misled. It is also important to determine potential profitability and to consider whether the franchise could reach the financial returns you expect. Unfortunately, most people don't want to spend the time and effort to investigate and make an informed decision. Potential franchisees must have sufficient funds to invest in the business and the commitment to run the operation. Entrepreneurs who truly want to be their own bosses may be disappointed with buying a franchise because of the restrictive requirements to follow a standardized operation and use only authorized products.
Some franchises are more restrictive than others.
Franchising can open the door to low-cost financing not available through traditional money sources. But franchising a new concept takes considerable up-front money that must be spent before you can collect any fees. Whether you are considering franchising your business or purchasing an already established franchise, considerable thought, investigation and evaluation are essential. Work with an experienced lawyer in your state.