1. Buy a Franchise
Buy a Franchise - 6 mistakes to avoid
So, you are looking to buy a franchise and you are wondering where to start. One of the most
important principles you need to adopt is “learn from the mistakes of others”. There is no
need for you to go into this blind and repeat someone else’s mistakes.
Avoid These 6 Big Mistakes When Buying a Franchise:
Buy a Franchise
Mistake 1: Following Your Passion
This one may seem strange at first. After all, aren you not supposed to follow your passion?
Is not that what everyone says, “do what you are passionate about”? Here is the twist –
passion is great and it is sometimes the only thing that separates you from failure, but to
succeed in business, you need a passion for starting and running a business.
Here is an example to help explain – say you have a passion for golf and your friends and
family encourage you to follow your passion. That’s great, but there is a huge difference
between becoming a professional golfer and starting a golf retail store. In this case, striving
to becoming a professional golfer to fulfill your passion for golf makes perfect sense. On the
other hand, starting a golf retail franchise store would be a recipe for failure. To succeed in
running a retail store, you need a passion (and experience) for retail operations, not golf.
Mistake 2: Buying a Hot Franchise
It is amazing what crowd mentality (following the herd) can do to a person when making a
decision. It is easy to fall into that trap where you think just because everyone else is buying
it, it must be the right franchise to buy. But you must be careful to avoid that way of thinking,
for a couple of reasons:
The franchise could be today’s fad and it may not stand the test of time. You need to ask
yourself, does it have what it takes to be a success 10 years from now?
It may be a good fit for others and simply not a good fit for you. It is possible you do not fit the
franchisee success profile and where others succeed, you would fail. Believe it or not, this is
a common problem — a franchisee evaluates the franchise, but not themselves.
Mistake 3: Overestimating the Franchise Business Model
If you are thinking that you will buy a franchise and simply because it is a franchise it will be
easy to start a business, think again. I have heard franchisees say, “ but I thought I just had

2. to follow the formula.” Yes, you will have to follow the processes and system procedures
outlined by the franchisor, but succeeding in a franchise is much more than that – you need
to know how to run the business. While a franchise can help you avoid many mistakes you
may have made otherwise, succeeding in a franchise business can be just a challenging as
starting any other business.
Mistake 4: Underestimating the Costs & Capital
Video Buy a Franchise
When starting a new venture, business owners are often very optimistic, sometimes too
optimistic when it comes to estimating the costs of getting a business up and running. Often
times the liquid capital needed to keep the cash flowing until the business generates it on its
own, is underestimated.
In the planning stage of a business startup, often a business owner tends to over estimate
the success of the business. The result is that they don’t have the liquidity needed to get
them through the first two or three years, the critical startup years, and the business fails due
to lack of capital.
Mistake 5: Not Conducting Franchise Reviews
This is simply the case of many not doing their homework. Of course they talk to a franchisee
or two, just to check the task of the list, but you have to do more. You need to not only talk
with the franchisees provided by the franchisor, but you have to do some of you own
investigative work and find other franchisees that are not on the “preferred” list. Make sure to
talk with franchisees that are in areas or own territories of a similar demographic. Franchise
reviews are one of the most important activities you can do when evaluating a franchise, if
you do it right.
Mistake 6: Lacking Sales & Marketing Skills
Learn how to Buy a Franchise
So much of a local business’s success today depends on lead generation. The life blood of
any business is the ability to target and secure customers in their local market.
The level of assistance provided by franchisors in the area of local sales and marketing
varies greatly, but at the time of writing this article, it is typically the responsibility of the
franchisee. I fully expect franchisors to begin centralizing this expertise and offering local
marketing services to its franchisees simply because of the specialized expertise needed.
However, you need to evaluate what the franchisor is providing for you today. This is one of
the areas that can make or break your business. You may have the best product or service,

3. but if customers aren’t finding you or are choosing your competition over you, it is not going
to matter.
In summary, when you are ready to buy a franchise, read the above bullets again just to
make sure you are not making any of these 6 big mistakes. Have a close friend or business
associate help you by giving you that valuable third-party perspective. Remember, you don’t
have to make the same mistakes. Do you homework and do a thorough franchise evaluation
to increase your chances of finding a franchise that is a good fit for you.