M&M Construction Services

Red Flags For Franchisees

Making the decision to become a franchise owner is one that should take a lot of consideration. After all, being a franchise restaurant owner is no small feat! There are plenty of opportunities to succeed in this venture, but there are also several pitfalls that could doom your ideas before they ever get off the ground. The good news about this is that many of these red flags can be deciphered before you ever make a decision to invest! We show you some of the most common red flags that franchisees should watch out for below!

Flaws In Interviewing

Before you sign onto any kind of restaurant franchise, you should be having extensive conversations with the owners and sales representatives associated with it. Take note of the quality of responses that they give to your questions. Are they able to provide appropriate answers about the franchise’s system and how it works? Can they explain basic details about the restaurant’s construction and any remodeling work done on the location? Can they explain the core provisions of your franchise agreement and basic operating procedures? If they can’t, their franchise is likely disorganized and you should avoid any further negotiations!

Complaints About The Franchisor

Before you meet with the franchisor - and especially before you agree to anything - it’s a good habit of conducting a background check of sorts. Go to your preferred search engine and look up the name of your franchisor. What kinds of search results come up? Do you see a lot of positive praise from past franchisees, or do you see a lot of scathing and negative reviews? If you see the latter, don’t proceed! You should always be looking for franchisors that have proven their pedigree to their franchisees.

Unclear Points of the Disclosure Document

When reading through a franchise disclosure document, everything should be laid out in plain language. It should be easy to decipher things like non-competes, contract terms and special clauses. These sections should get into the specifics of each point without trying to confuse the reader. Using any broad brush terms or glossing over important points should stand out as immediate red flags to a franchisee. Make sure to bring all of your questions about the document to the franchisor. Can they answer your questions to your satisfaction? If you can’t clearly say yes to this question, it’s time to move on!

Franchise Services with M&M Construction

M&M Construction Services has spent years connecting restaurant and business owners with stunning construction designs. Now, we want to use our decades of expertise to help franchise owners achieve their dreams! We can assist through many aspects of the franchise process to help you succeed. If you’re a franchise owner or looking to become one, contact us today to take your commercial construction project to the next level!

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