Should you really buy that franchise?

Should You Really Buy That Franchise? 7 Reasons Why You Should Hold Off

Franchises can be a great way to get into business with a big brand as a minimal risk investment. However, that doesn’t mean it’s risk free.

During your consultations with franchise companies there are some warning signs we’d recommend you look out for so that you’re not stuck with a bad investment.

Dodgy past

Make sure you’ve researching your potential investments heavily before you sign anything. A good start is to simply Google them to take a look at the reputation the franchise company has.

Dig deep to see if there have been any legal problems, customer complaints, dodgy PR or financial struggles.

While you’ll struggle to find a company with a perfectly clean record, it’s important that you know what you’re getting into. Customer complaints happen at every business, but is there a pattern?

Missing information

If the salesperson glazes over the fact that important data is missing or they promise to get it later once the paperwork has gone through, these are huge warning signs that you should not ignore.

What are they hiding? You don’t want to find out the answer to that question when it’s too late.

High pressured sales pitch

If after a high pressured sales pitch you feel a bit uncomfortable or rushed, you wouldn’t be alone. Plenty of people will be turned off a sale if there’s a huge sales pitch.

Surely if the opportunity is that great, it doesn’t need a desperate sounding sales pitch that tries to push you into a quick decision.

Bold claims

Watch out for businesses that have only been running a year or two and are boasting that they have hundreds of successful franchisees. There’s something that doesn’t sit right there.

Either they’re exaggerating or something else is going on. If they have so many franchisees, are they likely to have the capacity to support you as much as you’d like?

Training program isn’t great

While negotiating for a franchise, you should ask as many questions as possible. One of the key benefits of having a franchise is the support you (should) receive from the company.

A good franchise business will have a thorough training program to get new franchisees up to speed and a solid support system in place to ensure success.

If it sounds like you’d be dropped in the deep end once you sign the papers, then it might be worth looking elsewhere for something a bit more stable and structured.

Blaming franchisees

If the franchise company is quick to blame their franchisees for poor results, this is a bad sign. It means that franchisees might not be well respected in the company and will not be receiving much help once they sign the papers.

Changing methods

Any franchise company that boasts that they’re always changing the methods and concepts of the company is a warning sign. You don’t want to have to change every five minutes to catch up to the latest new idea. It shows lack of focus and that the previous ideas haven’t worked out.

Whether you decide to open a franchise or not, make sure you research everything you can about the company, how they’re doing, how people react to their brand and how they present themselves.

You can gather a lot from a few simple searches and save yourself the hassle of getting involved with a franchise that’s bound to fall.


Are you thinking about opening a franchise? Are there any other clear warning signs you’ve come across? Please let us know what you think.

Kara Copple
An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.