Why_Do_Some_Franchise_Businesses_Struggle_And_Fail_

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					Why Do Some Franchise Businesses Struggle And Fail?

Word Count:
543

Summary:
Most Franchise Businesses are successful but invariably like any other
business some do fail. Why do they fail? Most franchisors fail primarily
because they took the route of franchising their business without proper
planning and preparation.

Although franchising is a great way to grab market share quickly and
without utilising your own funds, it requires a great deal of work to
make it successful. The first and most important requirement for any
potential franchisor is c...


Keywords:
franchise,franchise business,franchisor,franchisee,franchising,business
franchise,


Article Body:
Most Franchise Businesses are successful but invariably like any other
business some do fail. Why do they fail? Most franchisors fail primarily
because they took the route of franchising their business without proper
planning and preparation.

Although franchising is a great way to grab market share quickly and
without utilising your own funds, it requires a great deal of work to
make it successful. The first and most important requirement for any
potential franchisor is can the business model be taught successfully?

Many franchisees will come from a background of zero business experience.
They will not only have to be taught about the franchisors products &
marketing but will during the course of their training have to learn
basic business skills like general day to day book keeping and proper
filing techniques!

In many cases a potential franchisee without any prior business
experience can become on of the top performers if s/he is trained
properly and given long term support. The reason for this is because the
franchisor is starting with a clean slate and the new recruit is more
likely to listen, learn and utilise the systems given.

People who already have business experience usually like to try and run
the franchise business in their own way. It takes a lot of effort to make
them utilise all the systems and methodology of the franchisor. Bear in
mind that these systems have take years of experience to create.

Another reason why some new franchises fail is that not every business
model can be easily duplicated to work in another location. Some
businesses might have been extremely successful in an area primarily
because of the peculiarities of the people who live there.

Some franchisors fail primarily because they entered the franchise market
under capitalised. Without proper access to funding and long term backing
a franchise model is not going to achieve proper market penetration. A
few businesses enter the franchise market place not understanding the
level of capital that is required to exploit their franchises.

Capital is extremely important when it comes to marketing the franchise.
Franchise exhibitions are not cheap and neither is advertising in
franchise publications and on the internet. Franchise experts also
command a high hourly rate when it comes to advising potential
franchisors.

Once a franchisor has secured the funding required and then created a
model which is easily taught and can work in most territories they have
to create proper documentation, operating systems, operator's manuals and
a franchise agreement. These are just as important if not more important
than the business model it self.

How can a franchisor expect their franchisees to pick the core skills
required if they have not gone to great lengths to document it in an
easily understood manner? Most franchisees use these daily and are almost
like a bible for the successful operation of the business.

After all is said and done no franchisor is going to be successful if
they lack basic communication skills. They need to be able to communicate
with all their franchisees and maintain a harmonious relationship. People
skills are extremely important in the franchise industry.

Franchising can be a very quick way of reaching out to new markets and
exploiting the potential of your business if properly handled.

				
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posted:3/2/2010
language:English
pages:2