When Ricki Wilson and her husband, Matt, decided to open a Butterfly Life health club franchise in 2006, they thought they were on the road to financial fitness. ‘We attended a seminar in Atlanta, and it looked pretty good,’ says Matt, 40. ‘They seemed like they had everything all together. The numbers looked very attractive in the sales pitch.’
It sounds nice: Pay what seems a reasonable fee for a prefabricated business, and watch the cash come rolling in. But when it comes to running your own franchise, pumping up profits isn’t nearly as easy as pumping iron.
‘The greatest pitfall is [falling] in love with a particular business model or brand,’ says Bob Snelling, president and founder of Honor Capital Group, a Plano, Texas-based lender to franchisees. ‘[Prospective buyers] say, ‘That’s for me,’ without looking at the negatives.’ And there are plenty of those, say the Wilsons, if you know where to look. Read more.