Stay Away from these Five Franchises:
While a franchise might look good on paper, it might be less attractive under closer scrutiny. For example, here are five franchise segments that you should avoid:
- Experts report a 60% failure rate for the restaurant sector. Ice cream is an urge purchase based on a customer getting hungry on a hot sunny day. The window of opportunity for success is extremely limited.
- The value of knowledge, education and betterment services are tough to quantify. Many people can gather boatloads of information freely on the Internet. Many people prefer entertainment and sports over educational products and services.
- Crazy fans love sports, but a sporting goods franchise has limited long-term potential. Many of the products are seasonal. Sporting goods stores face heavy competition from clothing stores and professional sports leagues.
- Beauty salons, tanning booths and spas target wealthy women with disposable income. Location in a posh neighborhood is essential for success.
- With all those businesses out there, surely copying, office supplies and business services would be profitable. While these services are needed, there are very low margins requiring high volume to make a profit.
Location, competition and market saturation are other important concerns when considering a franchise. Trendy, fashionable and popular items are all promoted at the same time. Every summer, there are three or four Hollywood movies with a similar theme. The same is true for franchises.
Not every business can be franchised and not all franchises are successful. Whitehurst Mergers & Acquisitions helps improve decision-making by providing relevant facts, information and perspective. Weed out the “bad ideas” with help from our professional business brokers so that you can find the “diamond in the rough.”