Laurie was heading briskly to her car when she answered a phone call from her friend Angela, but very soon she had stopped in her tracks.
“Trevor called me and said they wanted to sell and I should decide today,” Angela said, sounding worried, “but I’m so busy! I have a date tonight and I’m going to a concert on Saturday.”
Angela was talking about a hair care franchise. Trevor was the listing agent for the property, and Laurie hadn’t quite caught who was planning to sell. It was pretty clear to her, however, that the listing agent wasn’t the owner of the franchise, and might have quite a different agenda from that of a buyer.
“Umm… when did you decide that you wanted to own a salon?” she asked her friend.
“I never really thought about it before,” Angela admitted.
“Have you ever wanted to own a business?”
“It would be something for me to do,” Angela sighed.
Laurie got into her car and strapped on the seat belt. If having a couple of dates coming up made Angela feel too busy to pursue a business opportunity, she thought, Angela might not be ready to become a franchisee. As Angela continued to describe the opportunity, Laurie realized which franchise location Angela was talking about. “That place doesn’t seem very busy,” she said.
“Oh, it’s not,” Angela agreed. “It’s losing money, but that’s just because the current owner’s not managing it well.”
Laurie wondered what made her friend think that she’d manage it better. She decided not to ask.
This is a true story, though the names have been changed, and it’s probably not the first time something like this has happened. Sometimes a franchise investment opportunity arises when you least expect it. It can be tempting to jump right into a sale. Sometimes it feels like the Universe is telling you to give it a try.
But Angela should be asking herself some serious questions:
- Why is Trevor encouraging her to buy the business?
- Why does the seller want to sell the business?
- Does the franchise agreement allow the seller to sell the business?
- If so, will Angela need to apply to become a franchisee?
- Does she have the qualifications the franchise requires?
- Does she need to make separate deals with the current franchisee and the franchisor?
- Why is the business losing money? Who says?
- How much control does the owner have over income and outgo?
- Is Angela ready to become a business owner?
- Does Angela fully understand the business?
- Does she know her responsibilities to the franchisor?
- Is this the right franchise business for her? Has she considered other options?
A franchise business opportunity is a serious investment, and it’s worth spending some time on your decision. Know yourself, know the franchise, know the circumstances if you’ll be buying an existing franchise, and do your due diligence before you make up your mind.
You’ll be happier with your decision.
