Jim Laganke: 4 signs it’s a bad idea to invest in a certain franchise business

A franchise can be a fantastic business opportunity for aspiring entrepreneurs, only if they invest in the right franchise and at the right time. Why shouldn't it be? A franchise allows you to begin your career as a businessman without starting from scratch. However, new franchise owners tend to make mistakes while choosing the right franchise business due to a lack of knowledge. For this reason, Jim Laganke, the president at Stewart’s All American - one of the leading food franchises in America, advises new franchise buyers to take a mindful decision while buying any franchise.

Undoubtedly, franchises are one of the most stable business models available out there. This is because, you’re tying with an already proven brand with a strong, positive image. What better platform you can ask for to build your own business?

Well, it sounds like a solid business plan, but only if you know which is the right franchise business to invest in.

Are you planning to buy a franchise? Below Jim Laganke explains the signs that tell you shouldn’t invest in a particular franchise.

The offer is too good to be true - While practical knowledge is crucial to buy the right franchise, it’s always good to pay close attention to your gut. For example, if your gut feels that your franchise business opportunity is too good to be true, don’t neglect it. Instead, you should spend a little more time in investigation and background check of your preferred franchise business. In some cases, even bright shining business opportunities can have some hidden downsides. Therefore, you should always make a mindful franchise purchase.

Something is not right with people at the parent company - No one would like to work with a company if they are not comfortable with the people working there. And the same thing is applicable to the franchise business as well. If you feel the person working at the parent company is making all attempts to get you to purchase a franchise without learning all the facts, it’s time to drop your plan. 

Fee structure doesn’t seem right - Some franchisors are more concerned about up-front franchise fees than royalties, so you know what to do. You should always look for a franchisor who believes that the true sustainable value lies in royalties and not the fee.

You’re getting feedback from the current franchisees - Only a person running a specific franchise will know what it’s like to live, breathe, and eat with it. If you’re getting warned by people walking the walk as franchise owners, it’s time to take a few steps back.

In closing

If you’re planning to buy a franchise, it is important to know that not every franchise is an ideal match for you. Therefore, listen closely to your instincts and consider all the warning signs before you seal the franchise deal.

Location: 340 Saw Mill Rd, West Haven, CT 06516, USA

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