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6 Mistakes to Avoid When Buying a Franchise

When starting a business from scratch, it can be easy to make mistakes, especially if it’s your first time going through the process. Mistakes can happen when choosing investors, sourcing products or materials, building the brand, investing in advertising, and during many other steps along the way.

Mistakes are also a possibility when buying a franchise. Learn more about six of the mistakes to avoid when becoming a franchise owner.

1.       Not doing your research

Before buying a franchise, it’s important to conduct extensive research. The very first decision you’ll make is perhaps the most significant—the decision to embrace your entrepreneurial spirit and become a business owner. From there, you’ll decide on the franchise in which to invest by weighing your options and comparing details to determine the right fit for you. Review the franchise agreement or Franchise Disclosure Document (FDD), which includes conditions related to franchise ownership like the grant of franchise and term length, franchise cost including initial and ongoing fees, and operational requirements such as territory specifics, training schedule, and any other requirements.

You’ll also want to familiarize yourself with the size of the franchise system, including what type of support may be included from the corporate office or from the franchise network. It’s also valuable to know how many locations already exist in your area to help you determine the likelihood for your potential location to stand out, or if it could possibly have too much brand dilution in the city or region.

Don’t make the mistake of not doing your research when buying a franchise or investing in any business opportunity.

2.       Rushing the hiring process

When staffing your franchise location, remember that you’re ultimately in charge of building your team. Don’t rush the hiring process; instead, seek quality candidates and leverage the interview process to really get to know the people who want to help build the franchise business. Ensure your prospective team members align with your business goals and have the potential to make a difference and contribute to the growth of your franchise location.

Making the mistake of rushing through the hiring process can lead to high turnover and decreased employee tenure, whereas allowing sufficient time for the process, and even building in time for mentoring employees, can help ensure the right fit and sustained growth.

3.       Not following the system

Franchise systems are built on a proven structure and established business practices. When you become a franchise owner, you gain access to that established system, which is designed to benefit both the franchise owner and the entire system and brand. While many franchise owners have specialized skills and bring a wealth of business acumen to the operation, it’s best to rely on the franchise system. Trying to overcome challenges on your own or stray too far from the established practices within the franchise framework can not only take a personal toll but also be counterproductive to your business goals.

4.       Thinking it’s a foolproof process

Although becoming a franchise owner includes having the business framework laid out for you, it still requires a significant amount of time and hard work (in addition to your financial investment) to prepare, open your doors, and build out your individual location. Opening a franchise allows owners to focus more time and effort into the operational aspects of the business as opposed to building the brand, evaluating marketing opportunities, and sourcing materials, as startups may experience. But it’s not without risk. Don’t think that just because you’ve invested in a franchise, that it’s a foolproof process.

5.       Not getting to know your community

When opening a franchise, you’re providing products and services to your local community. The people in your area have the potential to become a one-time customer or lifelong, loyal customers, and a lot of that depends on your interactions with them. Providing a superior customer experience should be one of your main goals, and in turn, those customers will return and perhaps even tell their friends and family.

Franchise owners with The UPS Store also pride themselves on getting involved further in their communities, from giving back through local charities like the Toys for Tots Literacy Program, local fundraisers, and helping other business owners by providing crucial small business services.

Retail owners like Ashwin Narayan know the value of community engagement and lives by the mantra, “take care of your employees first, as they will, in turn, take care of your customers.” With a strong desire to provide great customer service in his community, Ashwin ensures his The UPS Store location holds up to the highest standards to become a staple in his community.

Not getting to know the community is a mistake to avoid when opening a franchise, as you’ll need a solid, loyal customer base to grow. Remember also that a poor experience can not only affect your individual franchise location, but also the entire brand across all locations.

6.       Thinking you’re on your own

When buying a franchise, it’s a mistake to think that you’re on your own. One of the many benefits of becoming a franchise owner is being a part of a much larger team—a collaborate environment where all parties are contributing to the process, with the franchisor and franchisee working collaboratively to build the brand and the network.

At The UPS Store, a support system is built into the franchising process. While retail owners have a lot of flexibility in running their business, building their team, and much more, there is a franchise development team and corporate support available along the way. When challenges or issues arise, retail owners have a support system to consult to work through the challenge. A large franchise network of other owners is also a great resource to access. By working with other franchisees and the corporate team collaboratively, franchisee feedback and success stories can be incorporated into the process to keep the system strong. That way, each franchise owner contributes to the growth of the entire system, improving brand strength along the way.


Learn more about franchising opportunities with The UPS Store by contacting our franchise development team. Discuss the possibility of owning your own retail location and becoming a valuable part of The UPS Store network.