I don’t want to be a Donald Downer today. But, in our non-perfect world, things regularly happen that are out of our control.
Like when a franchisor goes under.
In my experience as a franchise advisor, I’ve found that the number #1 cause of sleepless nights for people that are about to become franchise owners is what I call, The Mistake Factor, or TMF. It’s fairly common for franchise buyers…especially ones that have made the choice to figure things out all by themselves. These buyers tend to make a lot of mistakes. And, they are always thinking that they’ve missed something.
In a nutshell, TMF has a direct correlation with high-levels of paranoia. And this paranoia is usually the result of one thing:
Plain, old-fashioned fear
Now, it’s completely normal for people that are about to embark on something big, like buying a franchise for example-to be fearful. But, there are different levels of fear, as well as different causes of fear. Most of the causes of fear with regard to buying a franchise have to do with loss; a fear of losing money, which again, is completely normal.
As for levels of fear, I’d put not being able to sleep at night pretty darn close to the top of the range, and heavy daytime sweating a tiny notch down from it.
Of course, there are ways for you to become less fearful, and they have to do with your research-and how well you do it. It’s amazing what facts can do to reduce fear. And even risk. And prevent mistakes. Sometimes.
I’m obviously a huge proponent of great franchise research. In my book, I provide the top 40 questions to ask current and even former franchisees of the concepts you’re looking into. Some of the questions are very difficult to ask. But, as you’ll see in my 40-part series of blog posts that feature these questions, you will be able to sleep better at night if you have lots of facts.
The Non-Perfect World
You’d think that being armed with the best franchise research questions ever assembled in one place would prevent disaster. In a perfect world, yes…they
should will. The questions that I’ve put together are designed to prevent financial disaster. They are designed to turn you into a serious franchise fact-gathering machine. But…
Stuff happens. Franchisors do file for bankruptcy.
If the franchise concept that you ended up investing in goes under a year or two after you’ve become a franchisee, you need to know what your options are. According to a franchise attorney that I interviewed recently for an article I wrote for Small Business Trends, you do have options if your franchisor goes under.