If youíre Buying a Franchise Donít Go It Alone!
by Ed Teixeira
There continues to be a number of individuals that look to purchase a
franchise without the benefit of professional advice. It can be the biggest
mistake they will ever make.
Based upon e-mails and comments I receive from prospective and existing
franchisees and feedback from franchise attorneys itís obvious to me that some
individuals continue to evaluate and purchase a franchise without the benefit of
professional advice or counsel. Despite admonitions ranging from the American
Association of Franchisees and Dealers to the International Franchise
Association to franchisors there are certain people that just donít get it.
Whether youíre considering the purchase of a simple franchise concept that
requires a small investment or a franchise that includes a bricks and mortar
location you need to have professional advice at some step in the process. The
only people I would exclude would be a franchise attorney with a financial and
franchise operations background. I havenít encountered many of them purchasing a
The numerous articles and blogs that recommend prospective franchisees to
utilize professional advisors typically base their recommendation for the
complexity of the franchise disclosure document and related
- Understanding the legalese contained in the franchise agreement
on and interpreting key provisions in the franchise agreement
- Understanding the franchise financial statements
financial and investment advice to the franchise prospect
However, there are other reasons, some not so apparent, why itís important to
utilize professionals in the pursuit of a franchise.
- They can
provide a more objective evaluation of the franchise opportunity
based upon their analysis
- Because of
their experience and client practice they may have knowledge
regarding a particular or similar franchise that an individual
might not have
- There may
be specific obligations created by the execution of a franchise
agreement that are not readily apparent
objective third party could raise issues that go beyond simply
providing professional analysis. For example, they might discern
that the franchise is a risky match for the prospective
- They may
ask questions about the franchise operation that prompts or
raises certain issues. An open mind can be very helpful.
Although prospective franchisees are strongly advised to engage professional
advisors as part of their franchise process some individuals continue to go it
alone. This approach is reckless and in the end can be costly. When it comes to
utilizing professional advice in the franchise process the biggest mistake is to
be penny wise and pound foolish.
© 2012 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at
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