The Other Side of Franchising

Franchisors sell their businesses with the concept that you are in business for yourself but not by yourself. Sounds great right? Well I bought it. In 2005, I bought a decorating franchise. It was an exciting moment. I was my own boss at least that was what I believed. I found myself so frustrated. The franchisor required the franchisees to call in every week giving details of their progress. They did not allow the franchisees to use inexpensive outside suppliers. I was forced to purchase goods even if it was not used at the time of purchase. It was required that $25,000 be made within the first three months of operation. This made me extremely stressed out by the franchisor.

Many times, I felt as if I failed, I was incompetent. Efforts were made to promote my business and please the franchisor, but at the end of the day, they were not pleased. At one point, I tried to hire an independent contractor, but the franchisor informed me that I could not hire anyone. The reason they gave for their decision was that I only purchased one unit and I would be violating my contract with them.

The franchisor decided to buy back my franchise. They informed me that this would be in my best interest since it was going to get more difficult for me. I sold my unit to the franchisor at a loss. The non-competitive clause was enforced. I was back to square one with no idea what will be my next move.

I wrote this article not to discourage you from buying a franchise but to give another prospective of what can happen. I have a friend that owns a Golden Crust franchise, and he is very happy with his decision. If you are going to purchase a franchises do your research diligently.

-Speak with other franchisee (not the ones recommended by the franchisor)

-Request a copy of UFCO when you request information about the franchise.

-Hire an Attorney to review your documents.

-Call previous franchise owners; ask them why they no longer own the franchise.

-Franchises have rules make sure you can adhere to them.

-If you have creative ideas that you want to implement, I suggest you go into your own business. If you want to use someone else’s model, then a franchise is for you.