1. Unrealistic rate of return on investment

The franchisor in franchise chain publicized it through the Internet and other forms of advertising, and it only took three months for the franchisor to join the project, and the total investment could be recovered within half a year at most; The headquarters will be fully responsible for staff training, pre-advertising investment and unified store image design. However, after the franchisee joined in, it was found that the investment cost was far more than the original amount, or the cost of publicity was only the direct cost and did not include indirect costs such as management fees. The promise before the franchisor could not really be put in place, and it could not be profitable after several years, and it might even be declared bankrupt without any hope of profit.

It often takes quite a long time for many franchisees to recover their investment. If the rate of return claimed by franchisees is much higher than the average level of the same industry, it is doubtful. How can he be willing to transfer such a good project to you on such favorable terms? 2. The essence of "franchising" is to sell "equipment and raw materials"

Many franchise projects are ostensibly "franchising", but in fact "franchising" is just a beautiful cover, and the real purpose is to sell machinery, equipment and raw materials at high prices. This is a common phenomenon in franchise exhibitions at present. After you bought his equipment and raw materials at a high price, the franchisee ran away, and finally only the franchisee admitted that it was unlucky.

If entrepreneurs find that the same type of machinery and equipment can be bought at a lower price in the market when inspecting a franchise project, and the cost of buying machinery and equipment accounts for most or even all of the franchise chain amount, you should be careful to be cheated. 3. "Joining the flagship store" is actually a "trust"

Some illegal franchisees colluded internally and externally with the packaging and publicity of several franchise stores and model stores in the early stage, so that visitors could see that the business on the surface was booming, but in fact, most of those customers and people who praised the franchise store were "entrusted" by franchisees. Once you really join, the franchisor will only charge the joining fee and management fee, and he will not care whether you can make money or not.

so, I suggest that entrepreneurs should look at the actual operation of many other stores that have already joined under the same brand before making the final decision to join. Besides looking at the head office, you should also choose several franchisees at random to understand the situation, and at the same time hire experts to help you understand the daily passenger flow of franchisees through several days of on-site observation. What is the turnover? Can you really make money? There is an old saying: "Sharpen the knife and cut the wood by mistake", so don't be reluctant to spend a little more money to do a thorough pre-market investigation because you want to save money. 4. format contract trap

Some franchisees promise franchisees that they can buy all franchisees' products when signing contracts, but at the same time, they use format contracts to indicate that they must meet their agreed product quality standards. When the franchisee produces the product, the licensor often refuses to buy it on the grounds that the product does not meet the quality standards, and the franchisee can only "eat coptis". However, the franchisee has no experience when signing the contract, so it is impossible to know whether it can meet the agreed quality standards, and it is possible that the quality standards stipulated by the licensor are beyond the reach of the gods.

When entrepreneurs choose to join a chain project, the contract is the last barrier to protect their rights and interests. They can't just sign the contract. They must spend the necessary time carefully scrutinizing all the terms related to their immediate interests. If they feel that their ability is limited, it is best to ask the relevant professionals who can be trusted for assistance.

for entrepreneurs who are new to business, besides paying attention to the above pitfalls, it is also very important to optimize the franchise projects, including the development prospects of the industry, the position and market share of the franchise stores in the same industry, whether they have certain advantages in doing a good job in the franchise stores, the social popularity and reputation of the franchise stores, and the profit prospects of the franchise projects.