Systems Support

Why do franchises fail?

There is a commonly held myth that most franchised business succeed, while most independently-owned business fail.  While more than half of all franchises do succeed, many others fail.  Do you need proof?  Look in practically any FDD and you will see franchisees that just did not make it – sometimes within the first year, other times after several years.

They were given a proven business system, thorough training and ongoing support.  So why didn’t they make it?  While undercapitalization and increased competition may be part of the problem, most experts agree that franchisees most often fail because of performance related issues: the franchisee did not follow the system, generate enough leads or receive enough (or the right kind of) training.

If most of your franchisees are profitable, with only a few struggling, you may assume that you simply have a few outliers who ‘just didn’t get the message’.  However, what does the trend in your FDD show?  Are more of your franchisees failing each year?  How do you explain this trend to new franchise candidates?

There are three reasons that new franchisees struggle with performance issues:

  1. Their expectations or support are different from the reality of your system.
  2. They do not have the skills to implement your system.
  3. They have the skills to implement your system but believe that their way is better.
  4. Their training needed to be more granular.
  5. Their training needed to be delivered in the way that the franchisee learns (which may be different from the way your trainers teach).

At Fairfield Business Solutions, we have experts in franchising and adult learning.  We can help you to:

  • Develop and deliver training programs in a way that your franchisees understand, giving them the tools and the knowledge to implement them in today’s competitive environment.
  • Create operations and training manuals with step-by-step, easy to follow instructions.
  • Align expectations of potential franchisees with your performance expectations as a franchisor.
  • Provide a comprehensive analysis and recommendations of your communications system.

Fairfield Business Solutions | Phone 484.632.4183 | Email PO Box 693 | Edgemont, PA 19028 | Fax 562.502.3494
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