You’re looking into buying a Franchise, and you need the best information possible to make sure you make a good decision about buying a Franchise. Well, over the past 20 years, I’ve seen (and heard about) people making the same mistakes over & over again that added tremendous risk to that decision. In a few situations, these mistakes caused them to buy the wrong Franchise and resulted in financial problems that took years to work out. I sure would love to help you avoid that. So, here they are……my list of the 10 Biggest Franchise Mistakes Before You Sign Your Agreement.

1. Giving Up the Perfect Job. You may already have a great & well-paying job, and not appreciate how good you already have it when compared to the added risk, responsibility, work-load, stress level and administrative hassles of business ownership. And consider this: Many jobs (unlike the early years of a start-up business) can spin off excess income to feed a healthy investment & retirement account.
2. Wrongly Concluding That You’re An Entrepreneur. Just because someone wants to own their own business does not necessarily make them an Entrepreneur, and Entreprenural skills will bring the greatest level of success. If you mistakenly conclude that you are an Entrepreneur, the demands of running your own business may prove overwhelming. Some of us are manager-types (can manage, but lacks vision), some of us are technicians (can execute, but can’t manage) and some of us are Entrepreneurs (has vision and relentless leadership).  It’s critical that you know what skills you bring to the party.
3. Choosing the Wrong Category. It’s critical that you pick a business category that reflects your interest, skill level, values & lifestyle and ability to sell. If you wind up in the wrong category, it could make coming to your business a chore. That would be a huge mistake.
4. Under-Estimating the Capital Requirements. Hey, we’ve all heard that “it takes money to make money”. But here’s the next cliché on the horizon: “Too much debt will destroy your business”. Make sure you understand how much money is required for the Franchise (including working capital), and make sure you don’t borrow more than 60% of the funds.
5. Not Calling Enough Franchisees. The best source of information about a Franchise (good, bad and horrible) is their Franchisees…..and you desperately need this information to make a good decision. So, not calling a bunch of them is a massive mistake. Come on, if you’re too shy to engage a few folks about the most important decision of your life, it might be a sign “from above” that you’re just not ready for business ownership.
6. Not Researching Enough Franchises. Franchises are different, and you need to understand that by researching many of them. The key is to get beyond their rhetoric and glossy paper, and understand their track record for success and their philosophy on supporting Franchisees. Until you research several Franchises, you won’t know how to research ONE Franchise.
7. Not Meeting With the Headquarter Staff. Before you sign on with a Franchise, you must get some face-time with their key Managers (and ideally the CEO) not only for basic information, but to form a gut-feeling over this critical question: “Is this Franchise as interested in MY welfare as they are with THEIR welfare?” That cannot be determined over the phone or via e-mail. That plane ticket will be the best investment you can make.
8. Not Working Hard Enough to Develop Projections. You must go through the numbers to make sure the potential is there. And don’t get too excited by the results of your “best scenario” projections. You need to consider a few bumps in the road, because they will certainly be there (e.g. delayed opening, 10% construction cost overrun, higher labor costs, 4 months without a paycheck, etc.). And don’t forget to consult your accountant, lawyer and brother-in-law.
9. Buying a Franchise For Your Kid. Almost certainly a big mistake! You just can’t be sure that your son or daughter will want to stick with the Franchise after the Honeymoon is over. Young people can shift their attention and dreams like the wind. Don’t let that happen on your dime.
10. Wrongly Assume that Your Family Will Help You. I’ve seen many Entrepreneurs wrongly assume that their dad, wife or children will help out in the business, only to find themselves completely alone after just a few months. Hey, they have lives too, so don’t make their participation “do or die” for your business.

The biggest mistakes made before signing the Franchise Agreement are caused by shortcutting the research process. You need to understand your own skills & business aptitude, which business category is best for you AND which Franchise holds out the best opportunity. All of this requires lots of homework, and you cannot afford to skip any of it. So, get to it, and if you need help, give a shout. The Franchise Coach is here for you.

Mark Kaplan is the Franchise Coach, and editor of BestFranchiseInformation.com. Mark is also the CEO of Great Wraps, Inc., a rapidly growing Franchisor of Hot Wrap & Grilled Sandwich Shops. Mark has spent over 20 years in Franchising, and he has a no-nonsense way of showing Entrepreneurs how to be successful in Franchising. Prior to Franchising, Mark championed major, national Brands for Corporate powerhouses like Coca-Cola, Nabisco Brands & Colgate Palmolive.