Before Buying a Franchise, Don’t Trust But Verify (Part 1)

(FranchisePick.com)  Two comments on a recent post about a fitness franchise are very instructive to anyone considering franchise ownership.  One is from an enthusiastic future franchisee eager to sign with the fitness franchisor, and the other is from a disillusioned franchise owner in the same chain who is shuttering her club this Friday.

Franchise Pick reader KAT wrote:

I’ve spoken with very happy owners. No one says Corporate Support is stellar but each one felt they didn’t need any hand holding and are very active in advertising their business. I’m considering a purchase. The concept is too good to fail.

The last sentence made me run for the Pepto Bismal.  I truly believe that anyone who says “The concept is too good to fail” should be banned from business ownership for at least two years, and then have to take a test (written by ex-Quiznos, UPS Store and iSold It franchisees) before the ban is lifted.

There’s NO concept that’s “too good to fail.”

There’s no such thing as a concept that’s “too good to fail.”  Why?   Because there’s much more to achieving success than a good concept.   Many prospective franchisees miss this point, thinking that a great concept assures success. Successful franchisees recognize that the franchise concept and program are a blueprint and a set of tools. The franchisee must do the building. It’s up to the franchise owner to sign up enough members and keep them coming back month after month. A good franchisor will make sure a prospect understands that before they take their check. 

An uninformed fitness franchisee with unrealistic expectations and no clue about business is a danger to themselves, their employees, their members and the franchisor.  If KAT had done a minimum of research (like actually reading the publicly available franchise disclosure documents) she would have seen the six pages of store closings in the company’s Offering Circular.  Six pages of people with concepts that couldn’t fail.

KAT may have 9 lives, but I doubt she’s got unlimited funds to lose.

(Sorry. That’s an embarrassingly lame last line.  Couldn’t stop myself.)

READ PART 2:  Before Buying a Franchise, Don’t Trust, But Verify (Part 2)

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