Stop Believing Your Franchisor’s Projected Numbers

I see this so frequently, I must put out an alert: If you are considering a franchise opportunity, do NOT rely on their projected numbers as to what your sales revenue and profitability will look like.

I see far too many franchise operators who invested all they have into a huge commitment only to find out the projections were meaningless and the business model blows up. I see comparisons based on much different situations in regards to location and population density. I see pure exaggeration. I see every manner of fabrication or irrelevant comparison that people seem to be willing to invest their life savings on and take out personally guaranteed loans that will tank them completely when the franchise fails.

If only you did your own due diligence and stopped believing the self-serving fiction so many franchise businesses provide. If you are opening a small town franchise, why would you accept as a model an inner city franchisee’s numbers? Why not call a few franchisees directly, ones similar in profile to the one you would be purchasing, and see what is really happening there?

You cannot simply believe the numbers provided and invest your life savings on such say-so. It makes no sense and I see so many upside down franchises because they relied on projections that were extremely unlikely to come true.

Further, I see many franchisees that have little or no support and little or no advertising in their market as was promised. All of this could have been verified had they talked to enough other franchisees and gotten information on real experience – not promises – from the franchisor.

It is your cash and your debt. Be realistic and check out real comps. Do not rely on the franchisor’s projections. They are too self-serving and unlikely to be realized. I see it way too often, when it is too late.