I’ve found a new franchise concept I’m considering buying, but I’ll be the first franchisee. Is it wise?

There are pros and cons associated with being a first mover in a new franchise concept.


I’ve found a new franchise concept I’m considering buying, but I’ll be the first franchisee. Is it wise?

For a start you are a trailblazer establishing a customer base and growing the brand’s name. Chances are as the first franchisee you’ll receive some concessions such as lowered franchise fees. The cons of course relate to the pros.

If you’re not experienced in growing and running a business, it can be very challenging establishing a customer base and growing the brand’s name. While you may receive concessions, the franchise may be too young and inexperienced to offer you the necessary support and assistance you need.

There is also the risk that the company, while profitable and successful as an independent business, may not be over extending itself and the concept by adopting the franchise model.

So, the factors for you to consider are:

  • Do your homework on the franchise, especially its expansion plans
  • Make sure the company can provide support you need in the form of training, marketing and set up
  • Pay careful attention to the franchise disclosure document. If one is lacking, that’s your first warning sign, but if one does exist, review the terms.
  • Be aware of hidden fees and costs associated with the brand that seems out of the ordinary (this means you need to investigate other brands within the same sector). It may be that the franchisor is passing on costs to you and, again, is a warning flag.
Tracy Lee Nicol
About the Author
Tracy-Lee Nicol is the managing editor of Franchise Zone Magazine and deputy editor of Entrepreneur Magazine. She studied her Masters degree in Art History and Visual Culture at Rhodes University and spent the next two years working and travelling in Asia. Her love of people, business and teaching is reflected in telling the stories of entrepreneurs, franchisees and franchisors, inspiring others to take the leap to being their own boss and bringing about positive change in South Africa.

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