You have scouted the scene, you have researched franchise opportunities, you've talked with the head honchos and now you are ready to sign the papers. The adrenaline is coursing through your veins as you ponder becoming a successful entrepreneur. You've heard that a franchise is a fantastic way to get into the business world and be your own boss. Yet before you get started on your new franchise opportunity, it's a good idea to ask the franchiser, "In retrospect, what would you do differently in your early years as a franchisee?" This little nugget of wisdom can take you far in your endeavors. One common mistake that new franchise owners make is failing to negotiate the terms of their lease. Real estate costs are one of the biggest investments you'll make when starting restaurant franchises, fast food franchises or other business franchises. It's prudent to negotiate for the lowest possible base rent. Sometimes, you can gradually increase the amount paid later on, but aiming for a period of three to six months of free rent, while you're building your business, will save you a huge headache and allow you to focus exclusively on your business operations. Another option is asking for a leasehold improvement allowance, which could be anywhere between $5,000 and $30,000. This will help you expand your business location and make any necessary changes to your space, without having to pay immediately. Another franchisee mistake is assuming that all contractors charge the same for build-outs. However, construction and fixture costs can vary greatly, sometimes costing owners of a franchise opportunity tons of upfront loot. Many rookies later admit that they should have used competitive bidding before contracting, as it could have saved them thousands of dollars. The new franchisee can encounter a number of problems, but with a little bit of research and a lot of discussion, they can identify these pitfalls before it's too late. Before you get involved with a new franchise, you need to make sure you're the type of person who can handle these pressures. If you're sick of the 9-5 and think you'll be working less as a franchise owner, forget it! You need to be fully committed to this venture, particularly in the beginning, and you need to be aggressive in your pursuit of better prices and smarter ways of doing business. Tenacity and a hardworking spirit can go a long way for the right person.
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