In preparing this news story, I did a small analysis and I went and read all of the ads I could find for franchises on the market on the various sites, and in the franchise directories, as well as in the magazines you see on the journal rack. I read through classified ads, and I clicked on links to various franchisors sites. It seems nothing has changed in the last few decades. Prior to retirement I ran a franchise company, and naturally they were engaged in franchise sales.
Although I seldom participated in any flashy franchise sales ads or marketing material, I did note that numerous franchisors including some that most would think about very reputable, were engaging in borderline marketing hype. A solid franchisor ought to not must have an commercial in a journal that states; "this is the hottest new franchise on the market, get in on the ground floor, franchise territories filling up rapid."
Keep in mind, purchasing a franchise is a long-term business investment opportunity. When you sign a franchise agreement the terms will be five, ten, or even 15-years. You will be locked in one time you sign that franchise agreement, and you will be bound to all sorts of things. If the franchise you are purchasing is hot today, or if it is selling in to a fad, or a fashionable market, that could be short-lived, and you will be holding the bag for years to come when the market falls out for that product or service.
When I see stuff like that, I cringe. Those are the type of ads I would expect from multilevel marketers or sleazy business opportunities, not franchising organizations. Nevertheless, perhaps because it works, even some semi-legitimate franchisors place ads like this. Now then, to answer your question; ought to you buy the hottest new franchise on the market - probably not, and because something is hot today doesn't mean it will be the hottest franchise business model on the market tomorrow.
Perhaps this is akin to purchasing a fast-moving small-cap mutual fund. These little mutual money with the right manager can make lots of money in their first couple years, but as the fund grows in size, it becomes more bureaucratic, and they gets followed by other investors, and it tends to move slower, and thus, is unable to capitalize on the opportunities. The gigantic growth they experienced originally is no longer there, and the fund managers often quit and go find work elsewhere. In other words the brains of the organization leave which changes the whole dynamics.
The same thing can happen with a fast-moving hot new franchise. In fact, it happens on a regular basis. because a company is having a 500 or 600% growth rate for or years, doesn't mean it can continue that forever, in fact it is a rarity. And I would submit to you that when you see very quick growth rates like that, those franchisors can get themselves in to trouble. So what I am saying to you is be cautious in case you think you need to buy a hot new fashionable franchise. think about all this and think on it.
Although I seldom participated in any flashy franchise sales ads or marketing material, I did note that numerous franchisors including some that most would think about very reputable, were engaging in borderline marketing hype. A solid franchisor ought to not must have an commercial in a journal that states; "this is the hottest new franchise on the market, get in on the ground floor, franchise territories filling up rapid."
Keep in mind, purchasing a franchise is a long-term business investment opportunity. When you sign a franchise agreement the terms will be five, ten, or even 15-years. You will be locked in one time you sign that franchise agreement, and you will be bound to all sorts of things. If the franchise you are purchasing is hot today, or if it is selling in to a fad, or a fashionable market, that could be short-lived, and you will be holding the bag for years to come when the market falls out for that product or service.
When I see stuff like that, I cringe. Those are the type of ads I would expect from multilevel marketers or sleazy business opportunities, not franchising organizations. Nevertheless, perhaps because it works, even some semi-legitimate franchisors place ads like this. Now then, to answer your question; ought to you buy the hottest new franchise on the market - probably not, and because something is hot today doesn't mean it will be the hottest franchise business model on the market tomorrow.
Perhaps this is akin to purchasing a fast-moving small-cap mutual fund. These little mutual money with the right manager can make lots of money in their first couple years, but as the fund grows in size, it becomes more bureaucratic, and they gets followed by other investors, and it tends to move slower, and thus, is unable to capitalize on the opportunities. The gigantic growth they experienced originally is no longer there, and the fund managers often quit and go find work elsewhere. In other words the brains of the organization leave which changes the whole dynamics.
The same thing can happen with a fast-moving hot new franchise. In fact, it happens on a regular basis. because a company is having a 500 or 600% growth rate for or years, doesn't mean it can continue that forever, in fact it is a rarity. And I would submit to you that when you see very quick growth rates like that, those franchisors can get themselves in to trouble. So what I am saying to you is be cautious in case you think you need to buy a hot new fashionable franchise. think about all this and think on it.
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