The worst franchises have high initial investments, little transparency and negative growth rates
If you are considering buying a franchise, several factors are probably guiding your decision. They should include entry costs, the franchise?s growth rate, its continuity rate, its transparency, franchisor support and self-sufficiency. A negative growth rate for a franchise suggests that many locations have closed. Here are some franchises that flunk in some or all of these areas. You should absolutely avoid the following franchises, according to Forbes magazine:
- Realty World: This franchise sells residential properties and offers tools and mortgage options to home buyers. It has a negative growth rate, at -21 percent, and poor franchisor support.
- Fastframe: This franchise creates and customizes frames for pictures, art, TVs and mirrors. It has a steep initial investment for the type of business at nearly $128,000, a growth rate of negative 15 percent and low franchisor support.
- Dippin? Dots: This franchise shows that not all ice cream is created equal. Dippin? Dots is found in many malls and sells ice cream in flash-frozen beads (or dots) and also sells yogurt, sherbet and flavored ice. The initial investment is a whopping $182,000, its growth rate is an upside-down 16 percent, and it has poor franchisor support.
- Steak Escape: This franchise mostly sets up in airports and food courts. It sells cheesesteaks, sandwiches and French fries. The initial investment runs nearly $400,000, franchisor support leaves much to be desired, and the growth rate is negative 16 percent.
- Golf Etc.: This franchise sells and repairs golf gear and works with golfers to analyze their swings and find better gear for them. The initial investment is nearly $400,000, franchisor support is poor, and the growth rate is negative 13 percent.
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