How Do You Minimize Your Risk When Starting a Franchise?

minimize risk management franchise franchising

Some people might consider it too risky to jump into a new business with both feet. Aspiring business owners have many options available for how they wish to break into entrepreneurship. One of the most common is by investing in a franchise, which allows you to be a business owner without having a particularly unique product or service you want to offer the world. Since it is slightly less risky to own and operate than a startup, a franchise is a viable business model for individuals breaking into the business world or planning a career pivot. However, it is not without liabilities. For more information on how to minimize your risk when starting a franchise, please read on, then contact one of our experienced franchise acquisition attorneys today.

How does opening a franchise minimize your business risk?

No business is perfect or inherently profitable. However, franchises offer the following benefits:

  • Brand recognition: Popular franchises come with built-in brand recognition, meaning customers recognize these names and are likely already loyal customers to them.
  • A wide variety of options: From exercise to fast food, you have endless industries to choose from when starting a franchise.
  • Training programs: Franchisors do not simply give franchisees the keys to a franchise storefront without any prior knowledge of how to run the business; they interview prospective franchisees and explain the training programs available to them.
  • Franchise expenses are outlined in The Franchise Disclosure Document (FDD): Should you choose to invest in a franchise, you must first read and review the FDD, which is broken up into 23 parts and provides further insight into the costs of starting and operating a franchise.

How does hiring a professional manager improve operations?

If you are uncertain about your ability to run a small business, one good way to offset that concern is to hire someone to run the business for you, which accomplishes two purposes:

  • The manager brings instant experience to the new business, and
  • If you have another job, a manager will enable you to continue with your current employment

What skills do you need to minimize business risks to your franchise?

Before you decide to invest in a franchise, it is critical that you give yourself a careful evaluation. If upon evaluation, you find yourself in possession of the following skills, you will be ready to pursue entrepreneurship as a franchise owner:

  • Strong communication skills with employees, franchisors and customers
  • Ability to accept feedback, maintain an open mind and find opportunities for growth
  • Optimistic outlook
  • Capacity to challenge yourself as a business owner and not coast off the success of the pre-existing franchise

If you have any further questions or would like to commence the franchise acquisition process, please reach out to one of our skilled franchise law attorneys as soon as possible.

Contact Our Experienced Franchise Lawyer Today

If you have any franchising issues, contact Fortman Spann, LLC online today to schedule your initial consultation.

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