If you are interested in buying a franchise, before you get too deep into the process you will probably want to know if there is anything that will prevent you from completing your purchase. Every franchisor is different. So before you start to get anxious that you may be denied, take the time to get to know the franchise requirements.
>Of course, there are things that could prevent you from buying the franchise of your dreams, but there are also many things that will not. It is also important to note here that not all franchises have the same expectations or rules, so be sure to discuss your personal issues with the franchise you’re considering. Keep reading for an overview of what’s forgivable and what could be more difficult to overcome.
You Might Have a Difficult Time Buying a Franchise If…
You Currently Have Bad Credit
Obtaining financing for your initial franchise purchase is an important part of the process. However, financing can be difficult, if not impossible to do with bad credit. If you have had credit problems in the past (at least 5 years ago) and have shown a more recent record of making payments on time and improving your credit score, it can be possible to look past a less than stellar credit report.
You Have Filed for Bankruptcy
Filing for bankruptcy is a step beyond bad credit and can be difficult for a franchisor to overcome. While there is still a chance that you could buy a franchise, particularly if your bankruptcy was a long time ago, it is an indicator of irresponsibility and financial mismanagement that certainly does not make you attractive to a franchisor.
You Have No Available Cash
There is a range of financing options for new franchise owners. But to qualify, you must be able to demonstrate your financial fitness. If you have no savings and no cash on hand, it will be nearly impossible to raise the capital necessary to buy a franchise or to support yourself as you get your business off the ground.
You Should Be Less Concerned About...
No Experience Running a Business
Many first-time franchise owners have never owned a business before. Indeed, a good franchise system should be set up to give owners complete guidelines for how to operate the business. Rather than ownership experience, franchisors want to award franchise locations to those who are willing to learn and work hard to make their location succeed.
Your Specific Location
Once you choose the franchise you want to buy, you might be concerned about the system's current presence in your area. Even if there are currently no franchise locations in your region, when you get in touch with the franchisor you may find that they are actively expanding to your area. You certainly don't need to discount a certain franchise that has not expanded to where you live before talking to them.
Every franchise system is different. The most important thing to remember is to be upfront and honest with your franchise during the purchase process. Above all, what will prevent you from being awarded a franchise is dishonesty. A franchise is putting its trust in you to grow their brand, and they want to know that you will be able to hold up your end of the bargain.