Some Common mistakes made by new Franchisors

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The beauty of franchising is that it creates a win-win situation to all players involved viz Franchisor, Franchisee and the customer. With all the great advantages Franchising brings to a franchise brand, lot of new Franchisors make some basic and common mistakes which sometime lead to abandoning their franchise expansion program in the initial stage itself and in worst case scenario, to the end of their brand.

Here are some common mistakes which most of the budding franchise brands make in their initial stages of expansion:

  1. Getting too excited with inflow of Franchise enquiries: We have seen brand owners getting curious to franchise their business simply because they get frequent franchise requests may be from their family or friends. We have seen in most cases, such franchises neither give any return to the Franchisor nor they have control on their systems for these locations. In worst case scenario this even spoils their personal relationship and their brand identity.
  2. Franchising without planning: Franchising is not an impulse decision and one needs to strategically plan while making decision to franchise his business. In most cases the brand owners starts inviting franchise enquiries without having worked upon documents and processes and ends up with losing control on their franchises and even misappropriate use of their proprietary marks and confidential procedures
  3. Recruiting wrong franchisees: The most dangerous step in franchising is to recruit wrong franchisees in your franchise eco-system. Most franchise brands fail to filter such candidates and recruit incompatible franchisees sometime for the sake of entering new locations and sometime for earning the initial franchise fee. However, they don’t realize that such franchises will only be liabilities for the brand and can even pose a serious threat to the brand in future.
  4. Selecting wrong locations: Just imagine you have a good brand, a strong franchise system, a good franchise partner but a wrong location. Will that work? Probably not! This happens mostly when the franchisor and franchisees fail to carry out feasibility study and market analysis.

 

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