Why Franchisees Fail
Franchised businesses fail for many of the same reasons non- franchised ones do, just not as often. I have carefully studied faltering and underachieving businesses for years, and the reasons they don't live up to their potential repeat themselves over and over. Here are the top dozen:
- Unsophisticated franchisor.
- Undercapitalized franchisor.
- Ineffective key employees.
- Weak employee incentive compensation programs.
- Inadequate business plans.
- Wrong site selection.
- Inadequate market testing.
- Poor accounts receivable techniques.
- Significant forecasting errors.
- Lack of niche development.
- Weak marketing.
- Improper pricing.