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Log In / Register | Feb 20, 2017

My take on franchising generally...

The simple facts are these. Franchising is, and will never again be, what it was at one time. Regardless of concept it is today's multi-unit franchisees who have been with systems for a very long time are those that are most successful. Whether one is considering an emerging franchise or an established one the days of maximum EBITDA and real cash flow are over. Today, investing in a franchise is no less then, in most cases, buying yourself a job. Even then due to the costs of doing business, rules, regulations, rental prices for space, cost of goods, service business trends, and the next newest thing cast serious infection on the industry in general. Why the pursuit by little known or even well established franchises to international markets? A rhetorical comment really. When you can pay 1/8th the wage amounts in other countries and avoid reporting actual sales while paying far less in taxes you can be sure that's where the crowd is headed. Franchisors continue to tighten their franchise agreements to hold you personally liable in nearly every instance, blanket you with post term covenants that could and will cause you financial ruin, and have figured the very many ways to manipulate the FDD so that even your due diligence will be skewed in their favor. While true there are some successful and prospering brands and services they are today anomalies and not the rule in franchising. No matter what the IFA would have you try to believe Franchisings best days are now visible in the rear view mirror.

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