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Log In / Register | Apr 25, 2014

Interview: Teixeira Says Franchise Buyers Should be Careful Investors

Author and franchise consultant Edward Teixeira
Author Edward Teixeira, photo/teixeira

LONG ISLAND, N.Y. — Ed Texeira, founder of a consulting firm and the publisher of the online site Franchise Know How, has just released his newest book, the Franchise Buyer’s Manual. His primer provides advice for prospective and existing franchisees. Teixeira warns that buyers need to stop acting like consumers in wanting a franchise. Instead, they need to start analyzing like investors in deciding on the right franchise for them. "Analyze," he says.

The 35-year veteran of the franchise industry has worked in leading the franchising firms of convenience stores, glass room additions and healthcare staff recruitment chains. He speaks with the editor of Blue MauMau, Don Sniegowski, about what a buyer should do before he opens the door of his franchised business.

In the Franchise Buyer's Manual, Teixeira gives some practical guidelines and metrics of when to walk away from buying a franchise.

  • If the franchisor refuses to disclose (earnings) information, then walk away.
  • Franchised stores in a new startup franchising company are among the riskiest investments.
  • An investor should go elsewhere if there are closures in excess of five to eight percent of the total stores in a chain.
  • Seek professional help — don't let the authoritative-sounding Franchise Disclosure Document that is mandated by the Federal Trade Commission lull you into thinking there is investment transparency. "It is still limited," comments the author. He then provides comments from some of the industry's top attorneys on what an investor should look for in a disclosure document.

"I want people to be extremely questioning and to follow a process before signing on the dotted line," concludes Mr. Teixeira in the interview.

Listen to the interview (10 minutes).


Click on the arrow next to the speaker icon below (iPhone/iPad users, you need flash to see it) to listen to the interview. You can also download the Podcast (mp3 file).

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