Franchise businesses can be found on every street corner of America’s cities. However, you don’t have to look far to find one shuttered and out of business. Seth Lederman and his company, Frannexus, want to keep you from ending up in that predicament when you start your dream franchise. Or when you want to transform your independent business into a franchise.

“I went out to discover why franchisees were not doing well when they should have been because these were well-educated, established people with a good brand. But I kept finding a mismatch,” Seth says. “These people are making decisions like: ‘I like pizza, so I should buy a pizza franchise.’ That’s how many people make the decision.”

Lederman finds that many business people who enter a franchise don’t know what questions to ask before investing. Too often, the situation is not a good fit for either side. And do they really want to be a franchisee? Some people think this will be a passive income that they can sit back and watch the money roll into their bank accounts. But it’s a business and requires work, and that’s one of the things Frannexus advisors can help with.

“I think people should explore all their options,” Seth says. “And when they do, they’ll recognize that the likelihood of a successful outcome will be in business ownership versus any passive investment because they have no control over that. At least the business is their business. They own it, and they directly impact what’s happened to that business.”

Another thing that Lederman and his Frannexus advisors also caution on is that people need to be sure they choose the right business in the first place. They can win when they get into the right business, like with the right investment vehicle, whether it’s real estate, stocks or bonds. Make sure it’s the right business for you and your needs.

“Are they well suited for franchise ownership? Do they have a risk tolerance for business? Do they have the time to put in what would be necessary for a successful outcome? And do they understand that this does not need to be a soulmate theory for ownership? There’s not a single needle in the haystack that we have to find in order for this to work with them.”

Lederman also urges clients to think more deeply about a passive income, which many people think they want. He says it’s not as lucrative as running a franchise. It’s also more likely to be lost due to inflation or poor markets.

“And if you look at the long-term financial returns, dollar for dollar, the outcomes are much greater in franchising than traditional investment vehicles. Look at the return on capital. The rate of that return is stronger and less volatile.”

Lederman was a physician with a successful spine and sports medicine practice. He’s spent his life helping people in one way or another.

“I was a rink guard when I played hockey,” Seth says. “And later, I was a lifeguard when I became a swimmer. I mean, you look at everything I’ve done, and it was always about helping people navigate dangerous situations.”

Consulting on franchise decisions is very much the same. Instead of a literal danger to life and limb, in franchise circumstances, the danger is to a person’s livelihood and standard of living. In many cases, the stakes can be almost as high. But Seth Lederman and Frannexus are there to help, as always.