Franchising is an industry that has helped many business owners (like you) expand into different markets while at the same time allowing other entrepreneurs “to be in business for themselves, but not by themselves” (as the saying goes). It sounds great, right? And it is…. when franchising is executed correctly. However there are certain mistakes new franchisors make that could destroy their franchising efforts and ultimately lead to their demise. Let’s explore a few of the most common mistakes new franchise companies make and see what you think.
First Mistake Not Willing to Invest
For starters, as a business looking to roll out a new franchise, if you are not willing to invest the time, money and resources necessary to put together your franchise program, that is the first mistake. Sometimes you might simply be looking for a shortcut or the least expensive way to get your new franchise to market. In desperation you may even try to copy documents from another franchised company (a competitor) or use some template you found on the internet (see “Franchise Documents, Can I Just Switch Out My Name?”). Both of these “perceived solutions” are HUGE mistakes because these slopped together documents are not specific to your business that is being franchised. Even worse, laws and regulations in the franchise industry are constantly changing and if an existing franchise document is copied or a template is being used, such regulatory updates are absent. This could leave you and your business at risk and vulnerable in the future. As with anything if you are not willing to make the investment of money and time to properly put together your franchise program then franchising does not make sense.
Taking Short Cuts When Building the Franchise Program
As mentioned above there are so many nuances in franchising that the average person would not know. In our opinion, it is in your best interest to find a knowledgeable franchise development company who will build your franchise structure, put together your franchise documents and create a program that includes all updated regulatory standards and such franchise program is as unique as the business that is being franchised (read about the different steps we take to franchise your business and our strategy to franchise your business). This means that there is attention given to: how trade secrets are protected; how to stay away from being dragged into a claim; avoiding joint employer issues; revenue recognition; and vicarious liability. These are just a few of the issues that if not addressed properly can be detrimental to your entire franchise program leaving you unprotected, vulnerable and ashamed. In other words, working with a company whose focus is only franchise development (not diluted with a bunch of other services) who are knowledgeable and aware of industry changes, laws and regulations (opposed to just slopping together a franchise program just to get you to market) in the long run saves you tons of time, money and frustration.
Partnering with the Wrong People
In franchising “partnering” is a bad word (to find out why take a look at “Franchise Partner Why This is a Bad Word”). If you are like most business owners you pride yourself on the fact that you have nurtured your business and built it by yourself from the ground up, in most cases without assistance or any financial support. It’s very rare we see someone eager to give up part of their business in an effort to grow. Franchising is NO different. Why bring someone on who will make money off the success that you have worked so hard to achieve? Partnering may sound like a really good idea because the person that you are speaking with is a fast-talking salesperson. Believe it or not salespeople (specifically people who work for some already established franchise companies and even some franchise brokers) are known to sweet-talk potential new franchise companies by boosting their ego and making unrealistic promises. In most cases their hidden agenda is to offset their own company expenses, distribute overhead costs, satisfy their shareholders and later nickel-and-dime you for services they provide…all in addition to taking ownership in your business (equity). What you may have thought sounded like a good solution for your franchising efforts, is really not once elements of the relationship are uncovered. Yep, this is one of the top mistakes new franchises make (for more to be aware of with these types of companies take a look at “I Just Want Someone to Make a Franchise for Me No Scams”).
Other Common Mistakes
Other common mistakes new franchises make include not having the proper franchise marketing materials to give to interested applicants. As a new franchise, when you start to advertise, market and talk with interested applicants it is vital to have compelling franchise marketing collateral that addresses topics and answers questions about your franchise opportunity (see this article that defines what is franchise marketing collateral). If your marketing materials are weak or lack solid information, people will quickly lose interest and move onto the next franchise opportunity (and there are LOTS of them out there). Not having the right strategy when it comes to growth and not having a formal franchise sales and qualification process in place is a huge mistake some new franchises make. These new franchise systems are sometimes too anxious and bring on anyone who has the money simply because they are overly eager to award franchises. This leads to under-qualified franchisees not to mention unrealistic goals for growth and quite possibly opening too many franchises too fast. As a client, we teach you how to have the right strategy in place when it comes to goals for growth, qualifying applicants and bringing on franchisees.
At The Franchise Maker we teach our clients how to be a franchisor and how to avoid the mistakes mentioned above and more. Our number one focus is building a franchise program that protects you and to create a franchise program that is fair to you and your future franchisees. Our proprietary franchise development program includes putting together your franchise documents completely from scratch (learn about the different parts of a Franchise Disclosure Document). Every client that we bring to market, the franchise programs we build are a direct reflection of the uniqueness of their business. Nothing we do is cookie-cutter and no templates are used! We even review it all with our clients word-by-word and train them so they are well-prepared to talk with interested applicants, answer questions and easily explain their franchise program. Our clients are provided with deliverables, guidance, planning, franchise marketing collateral options, strategies for safe growth and even franchise sales training.
Want to put together a franchise offering with a franchise development company that can help you navigate around the mistakes new franchises make all while building an attractive and affordable franchise program? Call us directly at 1-877-615-5177 and we will be happy to explain further how our franchise development process will help you avoid making mistakes as a new franchise. We will answer ALL of your questions and determine if franchising makes sense for you.
- Successful Franchising is Keeping Franchisees Engaged
- Key Points to Building a Successful Franchise
- When Starting a Franchise Some Things to Consider
- Additional Reasons Why Franchise Systems Fail
- Franchising Requires Your Involvement
- About The Franchise Maker
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