Q&A

Question: Why wouldn’t you buy a Franchise?

Seeking quality legal advice from a franchise specialist should be taken before buying a franchise. Potential setbacks are:

1. 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.
2. 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.
3. 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.
4. 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.