Answer:
Seeking quality legal advice from a franchise specialist should be taken before buying a franchise. Potential setbacks are:
- Less autonomy:
Franchising is not a business model conducive to those who are entrepreneurially inclined. Running a franchise provides less independence for business owners, compared to running a stand-alone business. These operating restrictions are reflected in the terms of the Franchise Agreement. - Damage to the brand will impact your business:
Any negative damages to the franchisor’s brand will have a direct impact on a franchisee’s own business. This damage may be caused by either the franchisor or by other franchisees. - Franchise fees:
Franchisees are expected to make ongoing payments to franchisors. These could be important funds that could otherwise be used to invest back into the business. - No guarantees:
A franchisor can not offer prospective franchisees guaranteed success. It’s up to prospective franchisees and their lawyers to carry out due diligence before buying a franchise.
