One of the things most franchisers have in common is the strong inner drive to achieve success. Since that’s the case, why do some seemingly strong franchise ideas fail? If an individual is considering investing in a franchise, there are some ways to help ensure he or she does not repeat the franchise mistakes some others make. Most franchise ventures are successful, so here are a few of the top reasons for franchise failure and what can be done to try to avoid them.
Lack of Ongoing Support
If an established company decides to allow franchise opportunities, the level of training and support can vary greatly. Potential franchise owners should research the company thoroughly to make sure there are a strong support systems set in place. The training programs should be clear and consistent, and the support should still be available after the franchise has been opened.
Training and Customer Experience Inconsistency
Some of the most successful franchise opportunities stem from already established businesses. These businesses have a proven track record of progress and very specific ways to replicate the systems that are already in place. One of the frequent franchise mistakes made by owners is trying to deviate from these established systems in a dramatic way. Franchisers like to put their stamp on their businesses, which is common and can be a great way of customizing the franchise experience. However, trying to drastically change the customer experience too quickly for an established company can backfire.
Like any business, owning a franchise is difficult but very fulfilling work. Creating an inadequate business plan is one of the top franchise mistakes owners can make. Assembling a successful team to help get the franchise off the ground can aid in this process. If a financial consultant or accountant is involved, a history of specializing in franchises can be useful.
Insufficient Ongoing Business Monitoring
Thorough research needs to be one of the first steps for a potential franchiser, but the research doesn’t end with the opening day. Constant monitoring is the key to avoiding franchise pitfalls. Benchmarks and milestones need to be instituted from the beginning and evaluated periodically. Complacency can lead to a backslide, so constantly staying alert, looking ahead and finding new and exciting ways to generate new customers and sales should be at the forefront of any franchise owner’s mind.
Lack of Fit
Loving the products and services offered by a company is a solid way to start becoming involved with a company. However, becoming a franchise owner also involves also loving the often-challenging world of competitive business. The proper personality for navigating the ups and downs of business ownership is essential, and the lack of fit for this level of responsibility is one of the main franchise mistakes individuals make. A person who is the ideal fit for franchise ownership will also have the ability to be flexible, both with constant market change and with the established business model. Expectations need to be realistic, and someone who is not of the ideal mindset might want to give up before success is achieved.
Stretching Resources Too Thin
In terms of success, one of the major franchise mistakes an owner can make is taking newly acquired gains and immediately trying to add new ventures or start spreading finances too thin. If too much time and money start to immediately become reinvested elsewhere, the franchise can suffer. It’s common to see successful franchisers looking for new or expanded opportunities, but taking the time to ensure the franchise remains on the right track first is essential for longevity and true franchise success.
Potential investors and franchisers looking into starting a business should remember that a good fit, proper planning and quality selection are all key factors to achieving success in the industry. By examining common franchise mistakes, owners can help avoid the top reasons for franchise failure and enjoy true long-term success.