12 mistakes to avoid when investing in a franchise
Editor's note: The Business Mentor is a weekly business column by Armando "Butz" Bartolome, president of GMB Franchise Developers Inc. and chairman of the Association of Filipino Franchisers Inc.
MANILA, Philippines - Interested in investing in a franchise business?
Here are 12 ways to know if you're investing in a franchise the wrong way.
1. Hot na Hot
Oh, just keep asking around town, ask friends or even post on the Facebook to ask what are the "hot" franchises. Many people may be quick to tell you what they saw and heard. So you immediately grab the opportunity.
2. Keeping up with the Joneses
To keep up with your neighbors, you want to have what they have at all costs. This is to get even with them. After all, you like to be admired by your friends
3. Got to believe it's magic
You heard a neighbor saying a friend was able to recover his investment in a franchise in just two months. Wow, that’s super awesome huh? Let's follow the lead. You are hoping the magic formula of "get rich quick" comes your way.
4. Don’t care what franchise business is as long as it can give good income
Browsing through newspapers, magazines, and even Internet, you find ads with bold letters "NOW FRANCHISING P XX,000.000. It is so cheap and you can easily spare the money.
5. Franchise agreement? No need to study, just sign
So the franchise agreement is too thick and complicated? You just sign and give it to a lawyer to study. Anyway, in the worst case scenario, your lawyer will be the one to fight the case in court.
6. I do not like the product but income looks good
You are a businessperson and profit is your number 1 concern. You don't patronize the products since your taste differs from the targeted customers.
7. I own this franchise business so I can add any product I want
You believe that since you invested the business belongs to you. There is really no point asking permission from the head office.
8. I never met the real owners of this franchise. Why should I care?
You are after getting the business up and running. You are in touch with the sales people. The owners are often out of town or busy. I can just meet them later when they are available.
9. Why I should undergo training?
I'm too busy to train in this franchise business. Just let the staff do it. After all I am paying them.
10. I love the product! I do not care if customers like it too
You always believe your taste and love for the product are enough to be convinced. Your customers in the target location will soon adjust and learn.
11. I never met the franchisees of this company
Even when you began inquiring, you were told of an increasing number of franchisees. However you never met nor had an opportunity is organized for all franchisees to meet.
12. What manual?
You never received any manual from the franchisor. Is this about some memorandum sheets issued and sent from time to time?
To those who will follow what were written above, may I just say please think again.