Kaufman & Forman, P.C.
Call to arrange a consultation
678-957-7769 | 770-390-9200
Contact Us
practice areas

Common signs of a bad franchise opportunity

Considering buying a franchise? No doubt you have done your research to find out what opportunities are available and to find a business that matches your interests or skills. 

However, finding the right fit is only one part of the work to do before signing an agreement. You also need to be aware of the warning signs of a bad franchise. Even national chains are not guaranteed to be the best choices simply because of their wide presence. Many factors contribute to the success of a franchise, so watch for the following red flags as you consider your options:

High turnover rate

Of course, people come and go in the business world, but a high rate of turnover may indicate a deeper problem. The issue may lie with the business model, training or franchisor. Consider speaking with former franchisees to find out why they changed direction.

Lawsuits

It is impossible to completely avoid litigation; however, many lawsuits are preventable. Look at the franchise's legal history to determine if it was at fault in most cases. Litigation can reveal how the company treats its franchisees, employees and customers.

Consistently low success

Has the business been underperforming for a long time? The franchise may need to revise its model or improve its support to be successful again. Discover the income of the median franchisees to learn how much you would be likely to make.

High-pressure sales pitch

Purchasing a business is a major event that requires care and caution. Stay away from any franchise that guarantees immediate success, puts pressure on you to sign the agreement or offers numerous incentives to sweeten the deal. Also, have an attorney carefully review the contract to ensure it does not have ambiguous or illegal terms or is not inconsistent with the sales pitch you received.

No Comments

Leave a comment
Comment Information

Contact Kaufman & Forman, P.C. Now

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

get Legal Help Now

Kaufman & Forman, P.C.
8215 Roswell Road
Building 800
Atlanta, GA 30350

Toll Free: 800-461-5864
Phone: 678-957-7769
Fax: 770-395-6720
Atlanta Law Office Map

Review Us

Robert Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the May issue of The American Lawyer & Corporate Counsel magazine.Alex Kaufman has been selected as a 2013 Top Rated Lawyer in ‘Commercial Litigation’ as will be published in the December issue of The American Lawyer & Corporate Counsel magazine.

*AV Preeminent and BV Distinguished are certification marks of Reed Elsevier Properties Inc., used in accordance with the Martindale-Hubbell certification procedures, standards and policies. Martindale-Hubbell is the facilitator of a peer review rating process. Ratings reflect the confidential opinions of members of the bar and the judiciary. Martindale-Hubbell ratings fall into two categories: legal ability and general ethical standards.