BUSINESS ADVICE
7 Mistakes to Avoid When Investigating Franchises by Greg Mohr, Consultant, The Franshise Consulting Company
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rom the mistakes I’ve made, and what my clients have made before coming to me, these are what I think you need to avoid... 1. NOT UNDERSTANDING THE BUSINESS AND INDUSTRY An industry is a group of related businesses: they do similar things, and they compete with each other. In the footwear industry, for example, firms make footwear, sell it, or both. Players in the industry include Nike and Adidas, both of which specialize in athletic footwear;
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but the industry is also sprinkled with companies like Candies (which sells young women’s fashion footwear) and Florsheim (quality men’s dress shoes). • Is the industry growing or contracting? Are sales revenues increasing or decreasing? • Who are your major competitors? How does your product differ from those of your competitors? • What opportunities exist in the industry? What threats? • Has the industry undergone recent changes? Where is it headed?
NOVEMBER 2021 | WWW.FRANCHISEJOURNAL.COM
• How important is technology to the industry? Has it brought about changes? • Is the industry mature, or are new companies successfully entering it? • Do companies in the industry make reasonable profits? When investing in a franchise many of my people do not always go with the industry they have been working in for years. They know how to run a business and use these skills to start in another industry. They do, however, research