If you have always wanted to own a business, buying a franchise can help you achieve your dreams. However, not all franchises are appropriate in all circumstances.
You always want to do ample research before choosing a business you want to own. Otherwise, you may end up facing far more legal and financial hurdles. Below are three franchise risk factors to avoid.
What does a Furby have in common with a mood ring? They are two products that once mesmerized the nation before falling largely out of favor. You can still buy these items, but they have been relegated to nostalgic status and sell poorly today. Craft-beer breweries are an example of a franchise that had great popularity in recent years.
Avoiding fads that tend to pass and uber-trendy franchise opportunities ensures reliable returns on your investment.
2. Susceptibility to recession
There is concern about a recession in 2023, and many Americans already struggle to make ends meet. Choosing a franchise that struggles during tough economic times is a major risk. Opt for a business that provides goods or services consumers purchase regardless of the economy (food, personal care, etc.) to minimize the risk.
3. Seasonal ebbs
Beware of franchises that thrive only during certain times of the year. For example, a holiday decorating business will sell much less during the summer. If you want to earn a steady income year-round, consider ruling out franchises that experience seasonal ebbs and flows.
Selecting a franchise that minimizes your risks is always wise, and so is knowledge of the laws that govern and protect U.S. franchisees.
NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.