Ok, here we go. If you are even contemplating buying a franchise then you absolutely must know this next piece of information.

It could literally save you $50,000

So I had told the franchise that I wanted to leave as I was broke and it just was not working.  The franchise responded by telling me I owed them $50,000 and would fight me all the way to get it.

I thought my world could not get any worse before and now it just shattered. How could that be? I hadn’t earnt any money from the Franchise in 6 months so how did I owe them money.

They took great delight in telling me that I had signed a legally binding contract that meant I owed them that money. When I looked into it further, I realised they were right.

 You see, this Is how it works -

I had signed a five year Franhise Agreement that had a % of turnover paid to the Franchise for Management Fees and Marketing. After 1 Year there was a minimum payment set at $500 per month.

Can you see where this is going?

By their logic, and by the Franchise Agreement, if I left I was still liable to pay them 4 Years worth of $500 Dollars per month or $48,000.

Did I pay them?   Well that will be the subject of a later Blog Post..

You need to know this Information…..

So You want to know more about my Franchise Disaster?
I was faced with the decision of kissing goodbye to over $100,000 or trying to continue on with a franchise business that had no success, and didn’t give me any hope of ever succeeding.After much soul searching, I decided that enough was enough and that I would have to close down the franchise and return to work as a wage slave. I was going back into the rat race.

I rang the franchisors and explained my circumstances. I was broke. I couldn’t make the repayments on my house and I just had no more cash. I explained that I was prepared to walk away without trying to chase them for any money back.

All I wanted was my life back.

Do you know what the friendly, caring franchisor said?

Well - it’s a long story. And one that will be covered in more detail in a later blog post but essentially they said that It was not my decision and they would not let me leave.

This was not a franchise that had any retail premises or even physical products to tie me to the franchise. There was no reason why they should insist I stay - or so I thought!

I was broke and I told them that.

What did you think they said?

“Peter, we are not going to let you leave the franchise and if you insist on doing so we are will commence legal proceedings against you to force you to pay us the $50,000 you owe us”

Wow!! When I picked myself up off the floor and could compose myself enough to speak, I had to find out why they thought I could possibly owe them more money.

The answer that I found out amazed me. You need to know it as it could make the difference between you losing a fortune. If I had known about I then there was No Way I would ever have bought a franchise.

Want to know what it is? Read my next post entitled - “The dirty little secret that franchises don’t want you to know”

Who am I to give advice on buying a franchise?

Firstly, let me introduce myself. My name is Peter and I lost over $100,000 on a franchise.     Expecting me to be a bitter and twisted franchise hater?

Let me tell you that I am not.

Do you know who I blame? ————— No One!

If I was a blame type person - which I am not, I would blame myself and no one else.  But I’m not. Don’t get me wrong. Two years ago, I would have given you a different answer. I was bitter. I was consumed with anger, resentment, and feelings of revenge.

Let me tell you that it took an immense amount of time, inner soul searching and personal development to get to the stage where I could say that.

About 3 Years ago I returned home from travelling around the world (another story!) and decided that the employee life was no longer for me. I had had a relatively successful career in Sales and Consulting (and had completed an MBA) for small businesses and Corporates but did not want to return to being a wage slave.

I new I didn’t want a job (just over broke?) but had no real idea what I wanted to do. I had a vague understanding of franchises from their presence in the retail business. I thought I knew that they were a way of buying into a tried and trusted business that went a long way to kick starting you off on the road to successful business ownership.

I did a lot of research on the internet and interviewed a number of franchises. I researched many of the franchise opportunities for sale. I thought I had done a huge amount of investigation (a process known as due diligence) into the risks and rewards. I thought I did!! I now know better. In my later blog posts I will show you the back ground research that I did and more importantly……….

…… the research you should be doing now.

To cut my story short. I bought into a franchise that I think was oversold. Very few people wanted the product/service, the franchise was completely lacking in any ideas as to help. I had ‘invested’ over $70,0000 in the franchise direct, had set up a business with all the costs that come with that, and had very little income for 6 months.

I was in to the tune of well over $100,000 and facing one of the most difficult decisions of my life

Do you want to know what happened?

Well - read my blog post tomorrow………

The last few years have seen a major surge in peoples desire to find a way out of the rat race and set up a business. Often franchising is seen as the holy grail. After all, is it not a proven way of buying a business ‘off the shelf’ with guaranteed profits?

Unfortunately it is not all-ways the case. Business Franchise Opportunities are every where and realistically it does not take a huge amount to set one up. This is a fast growing market place and new companies and ideas are fighting for their piece of the action.

My goal with this blog is to provide you with some hard hitting facts, figures and a process of evaluating potential franchises so that if this is the route you decide to go down then it will be absolutely the right choice for you. If you ask the questions I will give you to ask, do your due diligence and work out exactly what it is you want to achieve from your business, then you wont go wrong.

This blog will update daily - so mark it in your favourites and come back for more.

You can survive in the franchise world — but make sure you avoid the sharks!!