How to spot a dud franchise

So, you are thinking of buying into a franchise, fantastic! It’s a great way to get a business up and running in little time. You gain access to an already established business strategy, policies, brand name and, you get to be your own boss.

However, there are many risks associated with buying into a franchise. Having founded Australia’s number one mobile dog grooming franchise, HydroDog, I can provide you with some tips so you aren’t caught with a dud.

The first step in avoiding a dud is contacting other franchisees, both past and present, to determine from their experiences whether you will continue with your purchase. Negative feedback may be reason for you to reconsider your decision. Maybe the franchise isn’t as successful as it appears, or maybe the franchisor is unreliable?

On this note, pay special attention to the franchisor. A pushy franchisor could be a sign that they are desperate for your money as their business isn’t making enough. A good franchisor wants to ensure that you are the right fit for their businesses and they won’t pressure you into the sale or rush the process.

Ensure you do your litigation research. It is a warning sign if the franchise has a history of legal run-ins where they are the defendant. However, if the franchise is the initiator, this is not to be treated as a bad sign but seen as a strong passion for the brand.

When buying a franchise, you should be provided with proper training to help you get the business on its feet. Look into this before purchasing a franchise to ensure you will know how to get the business started and receive ongoing professional support along the way. If you are not confident that the training is going to be enough, contact other franchisees to get their opinion. If the training appears unsatisfactory, I recommend looking for another opportunity.

I established the HydroDog franchise over 14 years ago, and recently sold the Australian rights. After two years in America I am returning to Australia to host my “UNLeashed Business Accelerator” tour for business owners and entrepreneurs in all the Australian capital cities and Auckland from 6 to 16 August that will cover topics such as building a successful franchise, creating a socially-conscious business, marketing, sales and growth strategy as well as finding the “why” behind your business.

Anthony Amos, Founder HydroDog

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