"Buying a Franchise" May Not be Right for You.
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There are many reasons why, for many, the purchase of a franchise makes sense. However, buying a franchise may not be right for you. I was, again, reminded of this "obvious and basic fact" during a conference call today with a client considering a substantial investment in a multi-unit franchise. The investment was sizable and, quite frankly, there was plenty of opportunity in the deal. After a substantial legal review (where everything looked good and substantial negotiating points were achieved) he decided that "becoming a franchisee was not right for him" - so he walked away from the deal.
I think the right decision was made. Not for any particular legal reason, but, because sometimes, becoming a franchisee is just not right. When your "gut" tells you its not right - then walk away. The reverse, however, should not be applied. That is, if, your "gut" tells you that a potential franchise opportunity "is right for you", then your next step is not to just sign a franchise agreement but, rather, to engage in a thorough "due diligence" evaluation to ensure that you are acting on solid information.
