Is buying a Franchise really for you?

Share this post:

Anyone going into business should spend some time engaging in a little navel gazing and examine (honestly) your attitudes, capabilities and goals.

There are no guarantees of success just because you are buying a franchise business. A significant percentage of franchise failures are the responsibility of the franchisees themselves. Reasons for failure can include:

  • The franchisee not following the franchisor’s system because the franchisee knows best;
  • Complacency;
  • Inability to live with and sustain early losses before the franchisee becomes established, ie not enough working capital;
  • A franchisee that has been in business before with entrenched ideas who cannot accept the rigidity of the franchisor’s systems;
  • Lack of family support;
  • Lack of sales skills;
  • Not having the right aptitude and attitude for the role;
  • Being unable to sustain long hours and lack of family time.

That is not to say that a percentage of franchise failure cannot be attributed in some part to franchisors, eg:

  • The fees are too high to enable the franchisees to make a profit;
  • Initial and ongoing training is inadequate;
  • Ongoing support is lacking or largely non-existent;
  • Marketing is ineffective;
  • Site selection is poor as a result of a lack of investigation, research and expert advice.

Before you launch into acquiring a franchise business, ask yourself some questions.

  • Is franchising really for me – do I understand what it really means – a franchisee is not an employee – a franchisee independently owns and operates their own business.
  • If the role is a physical one, am I physically fit enough?
  • Is my age and state of health suitable for the rigours of what may be long hours and significant stress?
  • Do I have sufficient capital to make it happen without living on the financial edge all the time?
  • What am I naturally good at – does the prospective Franchise business suit my strengths?
  • Do I have family support?
  • If the business involves dealing a lot with the public – am I well suited to that?
  • Can you handle having staff?
  • Are you prepared to put the time and effort into fully exploring the opportunity, doing the due diligence and research required?
  • Are you prepared to spend money on getting appropriate expert advice before you make a decision?

You must get good advice before you buy a franchise business.

That means legal, accounting and business advice – and that also means listening to that advice.

Don’t ignore the advice because it is not what you want to hear and because you have already made an emotional decision and made up your mind that you want that business.  Remember, there are plenty more business opportunities out there.

Sometimes it is better to have expended money on your due diligence and advice and then walk away if it doesn’t stack up – rather than making a poor business decision to go ahead and then later suffering  the financial losses of having to sell early or walk away with nothing.

Buying a franchise business does mean taking a risk. At some point you will need to make a commercial decision to go ahead or not.

If the proposed acquisition of the franchise business ticks all or enough of the boxes to encourage you to go ahead, then, having made the commitment – give it your all and make it work.

If you need advice or help to review a franchise opportunity then call Christine Matsinger at McColm Matsinger Lawyers on 5443 1800.


The information in this document represents general information and should not be relied on for your specific circumstances. If you require legal advice and assistance on the matters contained or associated in this document you should contact MMLaw. Please contact Christine Matsinger.

Share this post:


The content published in this Blog is in the form of academic papers and the opinions expressed herein are generalised. The information provided is for educational purposes, not specific legal advice.

The application of any principles referred to can alter from case to case and accordingly you should seek independent legal advice in respect of your individual circumstances.


Subscribe To Newsletter