Do Your Homework Before Buying Into A Franchise

Newsday:

Starting a business from scratch can be intimidating.

That’s why many entrepreneurs decide to buy into a franchise, which allows them to tap into an already established concept and draw upon the training and support of the parent company.

Still, there are lots of concepts to choose from, and before you fall in love with just any franchise, you need to do your homework and steer clear of the more common mistakes, say franchising experts.

“Franchisees don’t do enough due diligence,” according to Harold Kestenbaum, a franchise attorney who is counsel to Ruskin Moscou Faltischek Pc, a Uniondale law firm. “They jump into things they think are hot, and it winds up costing them.”
You need to treat a franchise just like any other business venture and thoroughly do your research, advises Kestenbaum.

“Franchisees who are sophisticated create their own business plan,” he notes. Among other things, a plan will help you get a better handle on finances and costs associated with starting and operating the business.

Too often, franchisees go into a business undercapitalized and end up overextending themselves, explains Greg Taylor, principal of Ideal Franchise Consultants Llc in Morristown, N.J.

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