5 Big Mistakes to Avoid When Buying a Franchise

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LOOKING TO BUY A
FRANCHISE?
Six Big Mistakes to Avoid!
by Daren Coudriet

Canadian Franchise Opportunities
www.CAfranchiseOpportunities.com

SIX BIG MISTAKES TO AVOID

So, you’re looking to buy a franchise and you are
wondering where to start. One of the most important
principles you need to adopt is
“learn from the mistakes of others”.
There is no need for you to go into this blind and repeat
someone else’s mistakes.

Page 2

Canadian Franchise Opportunities
www.CAfranchiseOpportunities.com

SIX BIG MISTAKES TO AVOID
Mistake #1: Follow Your Passion
This one may seem strange at first. After all, aren’t you supposed to follow your passion? Isn't that what everyone’s says, "do what you are passionate about"? Here’s the twist - passion is great and it is sometimes the only thing that separates you from failure, but to succeed in business, you need a passion for starting and running a business.

Here’s an example to help explain - say you have a passion for golf and your friends and family encourage you to follow your passion. That’s great, but there is a huge difference between becoming a professional golfer and starting a golf retail store. In this case, striving to becoming a professional golfer to fulfill your passion for golf makes perfect sense. On the other hand, starting a golf retail franchise store would be a recipe for failure. To succeed in running a retail store, you need a passion (and experience) for retail operations, not golf.

Page 3

Canadian Franchise Opportunities
www.CAfranchiseOpportunities.com

SIX BIG MISTAKES TO AVOID
Mistake #2: Buying the “Hot” Franchise
It’s amazing what crowd mentality (following the herd) can do to a person when making a decision. It is easy to fall into that trap where you think just because everyone else is buying it, it must be the right franchise to buy. But you must be careful to avoid that way of thinking, for a couple of reasons: 1) The franchise could be today’s fad and it may not stand the test of time. You need to ask yourself, does it have what it takes to be a success 10 years from now? 2) It may be a good fit for others and simply not a good fit for you. It is possible you do not fit the franchisee success profile and where others succeed, you would fail. Believe it or not, this is a common problem -- a franchisee evaluates the franchise, but not themselves.

Take the time to do your homework and choose the right franchise for you. Page 4

Canadian Franchise Opportunities
www.CAfranchiseOpportunities.com

SIX BIG MISTAKES TO AVOID
Mistake #3: Overestimating the Franchise Model
If you are thinking that you will buy a franchise and simply because it is a franchise it will be easy to start a business, think again. I have heard franchisees say, “ but I thought I just had to follow the formula.” Yes, you will likely have to follow the processes, system and procedures outlined by the franchisor, but succeeding in a franchise is much more than that - you need to know how to run the business. While a franchise can help you avoid many mistakes you may have made otherwise, succeeding in a franchise business can be just a challenging as starting any other business.

Make sure you have what it takes to succeed in business and the right franchise will help to improve your chances of success.

Page 5

Canadian Franchise Opportunities
www.CAfranchiseOpportunities.com

SIX BIG MISTAKES TO AVOID
Mistake #4: Underestimating Costs & Capital
When starting a new venture, business owners are often very optimistic, sometimes too optimistic when it comes to estimating the costs of getting a business up and running. Often times the capital needed to keep the cash flowing until the business generates it on its own, is underestimated.

In the planning stage of a business startup, often a business owner tends to over estimate the success of the business. The result is that they don’t have the liquidity needed to get them through...
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