4. Pick an great location.

   One of the most important factors for brick and mortar businesses is location. A marginal location may cost less, but if it’s not easily accessible you will have problems attracting sales. On the other hand, a busy location may be expensive, but if that’s where your target audience is you should be there as well.

5. Plan an exit strategy.

   A lot of entrepreneurs fail to realize the value of an exit strategy until they need one. For instance, if you wish to operate a franchise for a minimum of five years, you need to have a plan. Would you want to buy another franchise and expand into a new location? Are you reviewing succession plans to pass your business to an heir? These are just a few of the questions you need to answer as you draft your exit plan.

Pitfalls of Franchising

While franchising is an appealing opportunity to start a business, it is yet to be perfected. If you are ready to take the plunge, here are some setbacks you might encounter:

1. Competition may be tough.

   Part of the popularity of franchising as a business model is that many people see it as a viable way to start a business. So, you shouldn’t be surprised to find yourself in tough competition with similar businesses. As you review franchise opportunities, take note of the industries that are overcrowded.

2. You’re not really your own boss.

   A lot of people think that just because they own a business they are their own boss. This isn’t exactly the case with franchising, since franchisees are only allowed to use the brand’s trade name and processes – which means a franchisee still has to answer to”the company”.

3. Big isn’t always profitable.

   Another common misconception about franchising is that a branded business means it’s a profitable one. However, profit depends on several factors. Location of the store, the knowledge and skills of franchisees and their personnel, costs of operations. etc. As such, it’s safe to assume your revenue may not be the same as another location.

Apart from seeking guidance, it is helpful to ask people who have successfully owned a franchise. It is crucial that you do your research on starting capital, unique value proposition, regulations, etc. This data will help you decide if franchising is right for you.

This article has been edited and condensed.

Harlon Agsaoay is a blogger at Xight Interactive, adventurer, musician, and ocean explorer rolled into one. He appreciates life, because he understands we only have one opportunity to do as we please. Connect with @xightph on Twitter.