#1 of 10 Reasons NOT to Buy a Franchise: Questionable Profitability
Nolo.com features an article titled: Ten Good Reasons Not to Buy a Franchise.
According to the author, there are ten compelling reasons NOT to buy a franchise. We’re looking at them one-by-one.They are:
1. Questionable profitability. Most franchisors do not provide much information to potential franchisees regarding earnings possibilities, making it difficult to assess how lucrative investment in the company could be. Even the franchisors who do supply this information usually only give average sales figures and profits before expenses are deducted, numbers that aren’t very helpful when trying to determine if your individual franchise will be successful.
Weak point, IMHO. This could be said about any investment. What guarantees do the NYSE provide? What information and guarantees are available when you start your own independent business? As incomplete as the information might be, at least you can find out how the same exact concept you’ll be running is doing in other markets. The best source of sales and profit information is the company’s franchisees, not the franchisor.
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POSTED IN: x Franchise 101, x Insider Tips, xBuyer Beware
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