Is this the reason why your Franchise is not successful??
January 5, 2019
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The Indian Franchise Industry is currently estimated at $26 billion with an expectation to reach $35 billion by 2020. However, ‘With Great Power comes Great Responsibilities’ & if not done right it’s going to result in failure.
Here are some reasons why your franchise is not successful:
1.) Failure to follow the system
• The most important reason for Franchise failure is not following the system. In Franchise Business, there’s a prescribed way of doing things, that must be followed.
• Sometimes, a franchisee may do things in his own way, which risks the sales & profit & hence the whole business.
2.) Insufficient planning
• Before committing to the franchise, a franchisee should have a proper plan. A proper business plan is a roadmap to achieve high performance & success.
• Even the franchisor should be involved in the planning process & monitor it constantly to make sure that franchise operates according to the plan.
3.) Insufficient Working Capital
• One of the most common reason for failure is that the franchisee in undercapitalised. If the amount coming into the business is not greater than the amount going out than the franchisee won’t be able to pay the bills when they fall due.
• Understanding the difference between cash flow and profit can mean the difference between surviving and failing.
4.) Failure to Evolve
• The market of any franchise business keeps on changing from time to time.
• Both franchisee & franchisor have to evolve to keep up with the market & keep on monitoring how the business is going.
5.) Improper Training & Support
• There are some factors that are out of franchisee’s hand, insufficient training & support is one of it. This is likely to occur in new start up system compared to old established Brands.
Hence, franchisees should look into the assessment of training & support provided by the franchisor, to ensure that there is no failure in
6.) Lack of Skills
•A Franchise may love a business from customer’s point of view but on the other side it’s a whole new story.
• For example, a franchise requires strong selling skills and the franchisee is not a sales person. Although the solution might be for the franchisee to hire a salesperson, it’s easier said than done.
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