For those with entrepreneurial dreams, buying a franchise might seem like an easy way to launch into business ownership.

After all, with a franchise, much of the hard work is done. You’re investing in an already popular brand and often can capitalize on support from the franchisor before and after you open.

But, when buying a franchise, it’s easy for eager entrepreneurs to make substantial missteps that can throw them off the path to success from the start.

Here are 10 mistakes to avoid when buying a franchise.

You didn’t do your research.

The franchise you want to buy may be massively popular across the country and even in other parts of your region, but that doesn’t mean that your location will do well just because it’s part of a sought-after brand. A lot of the hard work falls to you, the franchisee.

You still must invest your time and money to ensure the business will be popular in your town or neighborhood. You need to find just the right spot for your storefront or office. And you’ll want to verify that the business plan, as prescribed by the franchisor, is something you can follow and makes sense for your specific situation.

All your money is on the latest trend.

Tea shops and poke bowl restaurants may be trendy now, but will the fad hold up in the years to come? Buying a franchise that takes advantage of the latest trend might seem like a great business plan. In fact, investing in a tried-and-true franchise likely will be a better and more profitable bet. After all, that’s the big advantage of buying a franchise. Unlike a new business you’re launching on your own, you’re investing in a proven enterprise.

You expect immediate success.

The same sandwich shop or tutoring center franchise that you plan to buy might be pulling in gobs of customers in the next town over, but that doesn’t mean customers will be lining up at your door when you open. It’s likely the other franchisees have already done the hard work that it can take to build a successful business – franchise or not. For many franchise owners, business can be slow going at first. Be prepared.

You never talked to other franchise owners.

Existing franchisees can provide critical information that will give you a clear view into what ownership of the franchise actually looks like. How much money did they need to open? What’s their profit? How much support do they get from the franchisor? What’s working and what’s not working? You’ll make a more informed decision if you have the answers to these questions from experienced owners.

You expect to be the boss.

The appeal of business ownership is that you get to be the boss – except when you are the owner of a franchise. Franchisors can wield considerable control over how a franchisee operates their location from its design and appearance to restrictions on what can be sold and what territory they can cover. If you want to really be the boss, open your own independent business.

You didn’t read every word in your franchise disclosure document.

These can be lengthy documents, but it’s vital that every entrepreneur read all of the fine print before buying a franchise. The paperwork spells out everything from the fees, including recurring ones, that are required to buy and run the franchise to restrictions on what a franchisee can sell or how they can manage the operation. Prospective franchise owners must understand every clause before moving forward.

You hired an attorney too late.

Your first discussions with an attorney should begin long before you’re ready to sign that franchise disclosure document. An attorney with experience representing franchisees can translate the legal language of the document, help you establish the correct business entity and provide expert support before and after the purchase.

You underestimated your costs.

You’ll pay fees, of course, to the franchisor when you buy the franchise. But you likely will shell out money for other essentials too. As you make your budget, consider the cost for real estate, construction of your storefront, professional fees, rent and utilities, supplies and other services. Those additional costs can quickly add up.

You expected all of your work would be done for you.

Franchisors can set detailed management requirements for franchisees to follow, but that doesn’t mean you can sit back and watch the customers and money roll in. Especially in the early days, it will take a lot of hard work to build, open and run the business.

You plan to not stick to the plan.

You might have grand visions for how you can improve the business once you open. Maybe the color scheme really should be red and blue, not green and pink. And maybe you’d like to add a few mixed beverages to your cupcake shop’s menu. Not so fast. At best, you’ll turn off customers who are loyal to that particular brand. At worst, you could be breaking the terms of your agreement – and face termination. Plan on sticking to the franchisor’s plan.

For entrepreneurs across the country, buying a franchise was the right choice for them. The key to their success is that they did their homework and that they have a support system set up to guide them along the way.

Are you considering buying a franchise? 

At Gouchev Law in New York, we work with businesses of all sizes, including franchises. Call us at (212) 537-9209 or schedule a free strategy session today to see what The Gouchev Law Firm can do for you.

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