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Most Common Mistakes Franchisors Do But You Should Avoid

by Isabel Blamey Professional writer
Staring any kind of business journey is challenging and risky. Franchising is one of them. If you have thought of franchising your business to make more business and expand it globally, it is no doubt the wisest decision ever. However, do not forget that when you are choosing to franchise your business, then you are certainly inviting some risks. Fortunately, any risks related to franchising can be avoided if you know about them earlier and take measures to dodge them. 


So, here we have mentioned the key mistakes most franchisors make in their first attempt to make careful.

Not estimating the finances well

Most first-timers fail to estimate the total overhead costs for starting up a franchising journey. Mostly, they overestimate their sales and think that the costs would be easily covered. Thus, they mostly run out of money in the initial months of starting the journey. It is for this reason, do some market research before starting your journey, know opportunities present in the market and understand the costs needed to operate your business as a franchise model. It will help derive realistic budget planning. 

Inadequate understanding of the franchise model

This is perhaps the biggest mistake a first-time business franchisor can make. The first thing anyone should do before researching for “how to franchise my business?” is to understand the general franchising model which is applicable for all businesses of any nature. It explains the certain terms or conditions which franchisors need to meet to ensure that their business is eligible for franchising. Besides, it helps them understand the policies of negotiations with potential buyers (i.e. franchisees). 

Not consulting with an expert 

Before you get ahead with your franchising opportunity, what is important is consulting with a franchisor expert who can help you understand all ground rules of operating a franchise business. There is major documentation involved i.e. the franchise agreement which the owner needs to give to the potential franchisees before contracting them. Thus, there should be some professional or consultant to guide on the legal and documentation matters.
 
Overlooking the opinions of the franchisees

By not listening to the interests of the franchisees, you will only lose your opportunity to grow. None would like to invest in a franchise business where the owner does not pay attention to their opinions. You need to create a common medium or platform through which the franchisees can voice their thoughts, new ideas on business offerings, and other opinions that will benefit the business on the whole. The benefits due to an idea by one franchisee can be easily channeled to others if the franchisor approves it. 

Avoiding costly franchising mistakes is only possible when you learn about them. Hence, explaining these mistakes is an attempt to make you more cautious in your journey of franchising your business. You can become a preferred franchisor whose business is successfully growing and potential franchisees are seeking an opportunity to get associated with your business if you start carefully avoiding all critical errors.  You need to start smartly with proper budget planning, expert consultation, documentation, and an appropriate understanding of the franchising model is what you most need to prepare yourself for the journey. 

Author bio:

James Corne is an expert franchising consultant working at a franchise institute which gives guidance on how to franchising your business. He is a blog writer too and mostly writes about the tips and rules for franchising. So, if you ever thought about ‘how to franchise my business’, just go through his series of franchising blogs. 


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About Isabel Blamey Senior   Professional writer

176 connections, 6 recommendations, 590 honor points.
Joined APSense since, June 21st, 2016, From Perth, Australia.

Created on Mar 20th 2020 09:41. Viewed 535 times.

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