Want to Buy a Cryotherapy Franchise? Cryo Centers of America Provides Ten Reasons Not to Do It
DALLAS, Dec. 7, 2017 /PRNewswire/ -- Investing in a cryotherapy franchise only to find it wasn't the right choice for you is an expensive, frustrating and horrible experience. Cryo Centers of America gives ten reasons not to do it.
Questionable Profitability
Most cryotherapy franchise owners don't provide much information to potential buyers regarding earnings possibilities. Even the franchisors who do supply this information usually give only average sales figures and profits before expenses are deducted, numbers that aren't very helpful when trying to determine whether your individual franchise will be successful.
High start-up costs
Before opening your cryotherapy franchise, you may be required to pay a non-refundable initial franchise fee, anywhere from several thousand to several hundred thousand dollars. In addition, you'll have to pay a lot to furnish your franchise with the necessary inventory and equipment. It can easily take several years to recoup all these expenses.
Encroachment
Imagine that you've just spent thousands of dollars opening your own cryotherapy franchise business, when another location opens across the street. There goes half your customer base. This type of thing happens to franchisees all the time, as nearly every franchisor reserves the right to operate anywhere they want.
Lack of Legal Recourse
As a franchisee, you have little legal recourse if you're wronged by the franchisor. Most cryotherapy franchisors make franchisees sign agreements waiving their rights under federal and state law, and in some cases allowing the cryotherapy franchisor to choose where and under what law any dispute would be litigated. Shamefully, the Federal Trade Commission (FTC) investigates only a small minority of the franchise-related complaints it receives.
Limited Independence
When you buy a cryotherapy franchise, you're not just buying the right to use the franchisor's name, you're buying its business plan as well. Most cryotherapy franchisors impose price, appearance, and design standards, limiting the ways you can operate the cryotherapy franchise business. While these standards can help promote uniformity, they can also stifle your creativity and ability to cater to local tastes or needs.
Royalty Payments
All cryotherapy franchisees must make royalty payments to the franchisor each month based on a percentage of sales, eating into the franchisee's net profits. These royalty payments can go as high as 15% of all gross sales. Do you really want to give away your hard earned money?
Inflated Pricing on Supplies
In many cases, the cryotherapy franchisor can designate your franchise's supplier of goods and services. They argue that this is to maintain quality control, but almost all franchisors receive kickbacks from the vendors. By not allowing you to shop around, you're forced to pay higher prices on supplies.
Restrictions on Post-Term Competition
Let's say that you decide to purchase a cryotherapy franchise, but after a couple of years you determine that you could run a higher-quality, more profitable cryotherapy business on your own. Unfortunately, due to non-competition clauses built into almost every franchise agreement, franchisees are not allowed to become independent cryotherapy business owners in a similar business after termination of the franchise agreement. By purchasing a cryotherapy franchise, you may be unwittingly limiting your business opportunities for years after the expiration of your contract.
Advertising Fees
Many franchisees are obligated to make regular contributions to the franchisor's advertising fund. But will they use the money to advertise your cryotherapy franchise? Quite possibly not! Franchisors maintain broad discretion over how to administer the advertising fund. In a case against Meineke Discount Muffler Shops, for example, it was discovered that Meineke was using the advertising fund for costs wholly separate from advertising, yet the court ruled in Meineke's favor, saying that the franchisor has no fiduciary duty to its franchisees.
Unfair Termination
Even the slightest impropriety on your part, such as being late on a royalty payment or violating the franchise's standard operating procedure, can be cause for the franchisor to terminate your agreement. While most cryotherapy franchisors are not this strict, the possibility of losing your entire investment for being late on a payment is downright scary.
In all, there are better ways to start a cryotherapy business without joining a cryotherapy franchise. Companies like Cryo Centers of America, which is America's fastest growing cryotherapy brand, offer a wealth of resources and detailed information on all aspects of starting a cryotherapy business without the limitations of a franchise. For more information visit http://www.feelthefreeze.com.
Media Contact:
Shaun Hernandez
[email protected]
214.383.9998
SOURCE Cryo Centers of America
Share this article