There are many reasons why a franchise may fail
A short while ago, I wrote about the one reason franchises fail ─ you! In that article, I detailed seven mistakes that new franchisees make before they buy a franchise:
You haven’t planned for cashflow
You aren’t suited to the business or life as a franchisee
You don’t get the training and support you need
You don’t have an adequate business plan
You have unrealistic expectations
You don’t follow the franchisor’s business model
You don’t hire a good franchise attorney
But what if you have avoided all these mistakes on your way to investing in a franchise opportunity? Are you now free and clear?
Sorry to say, there are still mistakes that franchisees make ─ especially those who are new to franchising. If you want to succeed as the owner of a new franchise business, you’ll also want to avoid these eight common mistakes.
Not knowing your franchisor
If you are thinking about buying a certain franchise, it’s best to get information from their website, attend an open house, or talk to their current franchisees. You see, it’s not enough to know how a franchisor does things. What matters is that you have the same values and mission. Cultural fit is every bit as important as business fit.
Watch out for those red flags. Is the franchisor transparent about their business? Have you uncovered some deceptive information? Is it difficult to contact the franchisor? Is the franchisor more interested in short-term gain than your long-term success?
Make sure you get deep into franchisor research before you buy a franchise business. Treat it like a marriage ─ you wouldn’t get married without really knowing your partner first, would you?
Not asking for or taking your franchisor’s advice and support
Many franchisees think that they know best and don’t take their franchisor’s advice or support. Why wouldn’t you ask for advice? Surely, the only reason is pride ─ and we all know that pride comes before a fall, or, in this case, fail.
Remember, the franchisor wants you to succeed, and they have the experience to help you through whatever business issues are hampering your progress. It may not be easy for you to discuss your struggles with your franchisor, but they absolutely are there to help you. Face the situation, and speak up. You’ll have a more successful business because you do.
Not engaging in the business
A key to success as a franchisee is to make sure that you are fully invested in the business. It’s a big mistake to think that you can buy a franchise and then walk away, allowing someone else to manage it for you. This is a business investment, not a passive investment. You will have to get your hands dirty ─ your efforts will be rewarded.
Not looking to develop yourself and others
It’s important for franchisees to understand the importance of self-development and leadership skills when it comes to their success as a franchisee. Developing yourself and the team is essential for success.
The best way to develop yourself is by learning from others and learning what you don’t know about the industry. Take time to observe people around you, adopting strategies that work for them, and learning from mistakes. You’ll be surprised how these things will help you become more successful as a franchisee.
Similarly, developing your team is a key to achieving success. A formidable team will help to build your business, be more agile and more engaged with your customers and colleagues. So, make sure that you develop the skills to lead, motivate, and guide your team members so that they know what needs to be done and how they can be successful.
Not looking for other franchisees’ opinions and advice
Many small business owners and franchisees suffer this mistake ─ not looking for advice or feedback from other franchisees.
When you are new to the franchising industry, it can be difficult to know what steps are necessary for success. Mistakes result in losing money and not attaining success that could have been possible with help from experienced franchisees.
So, be open to feedback from other franchisees ─ they have been through the same things you are experiencing, and their experience can be invaluable to you.
Not understanding that the franchisor always has the last word on what you do
In franchising, the franchisor has the final say in everything. Ultimately, it is their reputation on the line. They have a brand image to maintain, and business processes and systems that deliver success. The Franchise Agreement will set out your responsibilities and the rights of the franchisor ─ don’t break it. Acting as a maverick can lead to legal action, including removing you as a franchisee.
If you are committed, follow all procedures, and don’t breach any agreements with the franchisor, then you will have nothing to worry about when it comes to your fate with the company.
Hiring the wrong franchise consultant
Hiring the right franchise consultant is a crucial part of your success. They can help you make the right decisions and avoid common mistakes that can be costly.
When considering a consultant, learn about their background, experience, and expertise. Ask if they have helped people like you to become successful franchisees.
A good consultant will help you identify your aptitude for business, and what types of franchise might best suit you. They will remove the emotional aspect from the process of franchise choice, and help you find the perfect business for you.
Thinking a franchise can’t fail
A franchise can’t fail, right? Wrong. While buying a franchise business should improve your chances of being successful ─ after all, it’s already a successful business with high-quality brand recognition, and plenty of support and advice to help you be successful – it’s still a startup business, and some franchisees fail.
There is no room for complacency in business. Hard work, commitment, knowledge, support, and the strength of a good team around you are all needed for success.
What’s your first step to being a successful franchisee? Take our franchise aptitude assessment.