An aspiring entrepreneur might consider buying a franchise for multiple reasons. For starters, it lets one launch into an established business where most of the hard work has already been done. The individual could capitalize on support from the franchisor before and after the business opens. But despite all the advantages of buying a franchise, there are a few drawbacks. An eager entrepreneur who makes purchasing mistakes might face various challenges throughout the venture.

Lack of research
Insufficient research might lead an entrepreneur to walk into a space one has little to no knowledge about. One should learn about the positives and negatives of investing in a franchise before signing up for it. Visiting franchise exhibitions and speaking to existing franchises would help an entrepreneur better understand the business model.

Inadequate funding
If one does not have good financial backing, one might need to secure funds to invest in the franchise. The money must cover various elements associated with the purchase, such as startup costs and expenses to run the franchise for at least a year. An entrepreneur usually prefers a combination of a Small Business Administration (SBA) loan with a Rollover for Business Startups (ROBS), which is highly beneficial towards the franchise’s operational goals.

Assuming complete ownership
Unlike owning a business started from scratch, an entrepreneur who buys a franchise is usually not the sole owner. Franchisors typically have considerable control over the franchise’s operation, location, appearance, design, goods that could be sold, and covered territory.

Wavering from the business plan
If one goes against the guidelines set by the franchiser and makes changes, such as changing the color scheme or offering new products to users, they might find themselves in a challenging spot. Doing so might drive away customers that are loyal to the existing brand. Additionally, one might also break the terms of the agreement and face termination, along with legal charges.

Overlooking the agreement terms
When signing a contract, one must always read and understand all the terms and conditions. The paperwork contains everything necessary to buy and run the franchise, including recurring fees, what the franchisee can sell, and how one can manage the operation. Failure to pay attention to this might lead to one getting limited control over things they wanted to handle most or overpaying for the franchise. It is wise to hire an attorney to identify any potential issues and ensure the agreement is legally binding.