If you are going to purchase a Franchise and invest thousands of dollars as well as your time and energy, you need to first do your Due Diligence! When it comes to becoming a business owner, there is possible risk involved at almost every turn on the path to success. One of your most important jobs as a prospective franchise owner is to mitigate as many of these risks as possible. Focusing only on how successful the franchise has been historically is not always the best way to properly evaluate if that franchise is the right one for you long-term. Although becoming a franchise owner does offer you some ease, it still does not come without some risks that you need to know before making your franchise investment. Since you are investing both time and money in franchise ownership, there is no way to stress how extremely important it is for you to properly conduct your own due diligence or hire a firm to do research on the franchise you want to purchase. One thing that I can guarantee you is the risk of you not doing so can cost you thousands of dollars, years of legal issues and being stuck with a bad franchise.
What Is Due Diligence?
By definition, due diligence is the reasonable steps taken by someone (you) to satisfy a legal requirement, especially when it comes to buying or selling something. Or, it can also be defined as the reasonable care that you exercise to avoid harm to your person or your property – which more applies to the due diligence done in investing in a franchise. In other words, it is you researching all aspects of a franchise to ensure that it is a good fit.
Doing your due diligence involves thoroughly researching the franchise opportunity you want to purchase. It is important that you know not only exactly how much the franchise is going to cost, but what these costs are going toward, what will be expected of you and what to expect in the future. Unfortunately, sometimes doing research on your own is not enough. That is where the assistance of Triton can make a huge difference to the final outcome of your franchise selection.
Having the assistance of a firm like Triton when it comes to due diligence helps ensure you will have a better experience and make a better decision. Triton can assist you with the necessary research needed to keep your investment safe. We have the ability to provide you with the facts and information needed to help you make the right decision. And then, you will have the opportunity to sit back and watch that opportunity pay off.
A bad franchise purchase could lead you to financial hardship. And, sadly, these bad franchise opportunities aren’t always obvious to franchise buyers. While it might seem like a great idea at first, there could be an incredibly low return on your investment (for context, see the Forbes Worst Franchise List; scroll to the middle of the page on the Forbes Worst Franchise list to see the listed franchises).
Just think about it for a moment – would you ever purchase a car without looking into the Kelly Blue Book and all the different facts about the car? Would you buy a used car and just take the person’s word that it had never been involved in a wreck? The chances are you answered “no” to that.
Why Is Due Diligence Important?
Instead of losing money on a bad franchise purchase and finding yourself in a financial rut, you can experience the true pleasure of becoming a franchise owner.
As a successful franchise owner, you will have the opportunity to experience financial freedom and prepare yourself for a happy retirement. And, the options don’t just stop there. As a franchise owner, you could choose to own multiple franchises, move around with your franchise as you open one in a new area, or you could just hold onto your one franchise and watch it grow for years and years to come. The opportunities are endless!
A franchise is a great way to become a business owner without the hassle of drafting the idea yourself and sorting out all the logistics. When you purchase a franchise, you are purchasing the ease of using the franchisor’s established brand, business name, and even having support from the franchisor to ensure you have everything you need to succeed in the franchise industry.
Remember, a franchise decision that is not based on considerable due diligence can leave you in a disastrous financial situation. Don’t exempt yourself from the due diligence process and end up in a very unfortunate position. Instead, do your due diligence, and best yet, enlist the help of professionals such as Triton to help you become a successful and profitable franchise owner.
La Mancha Sims is Managing Director and Founding Partner of Triton Business Group, Inc., a business funding consulting firm located in Decatur, Georgia. La Mancha is a former Naval Officer who has over fifteen years of experience in franchise and commercial finance, specializing in assisting entrepreneurs who want to enter the franchise industry as owners or consultants/advisors. You can reach La Mancha at 770-249-2357.