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What If Franchising Goes Wrong?

If you have ever thought about opening your own business, the second thought that has probably crossed your mind is "what if it fails?" This is a common initial reaction to any risk and should be considered before any business venture. Franchising can be a rewarding venture with unique challenges and when reviewing different franchisors you will want to look deeper into how they may have handled challenges in the past. However, there can be a couple of different reasons why a franchisee / franchisor relationship may not always lead to success.

Not the right fit?

Franchisees become a team with their fellow partners and with their franchisor. As with any team a great fit is what leads to success. This is where the true value in franchising is, more than products or brand. When you become a franchisee you purchase the right to operate under a successful brand and provide structured products or services. However, this is not the #1 reason why most join a franchise network. A franchise network will span over different regions and territories while comprising a network of peers. All business will come with challenges but franchises have the benefit of turning to their franchisor or others within the network. This is essential when a franchisor is interviewing potential representation for an area. If a franchisee does not align with the core values, follow the systems and practices set out by their franchisor, or take advantage of opportunities provided through their network, they may not see the same success as other locations.


Starting a business is going to have costs. It's fairly standard knowledge that franchisors will charge an initial franchise fee, along with royalties. However, do not make the mistake that this is all it takes to get the business going. There may be start-up costs to improve the appearance of your location (think about how all McDonald's restaurants have a similar interior and exterior look), along with operating hard costs, inventory, and local marketing spend. It can add up quickly. In your due diligence process your franchisor should outline all hard costs and potential upcoming costs that may arise. It is also safe to put aside enough savings to keep your personal household running for a minimum of year.

Exterior Voices

Just as you asked yourself, "what if this doesn't go right?" there may be others in your life who will echo this sentiment. While there will be positive and supportive voices who will tell everyone about your new business, be wary of others whose opinions may differ. This is not strictly specific to franchising. Ask any entrepreneur or business owner, and you can be sure they have a story about someone who said they "can't" do this. Starting a business will have many factors but this one of the easiest (and can be efficient) changes you can make in your life to see success in your business.

Life happens

Simply put, there is no way to determine what will happen in the future. As this article outlines when you enter into an agreement with a franchisor, you are entering into a partnership and team. There are many different events that can become a factor in the franchisee's life such as sickness, family matters or physical challenges. You can find details about how your franchisor may handle the "worst case scenario" during your due diligence process and through your "Franchise Disclosure Document".

When entering into any business venture there will be doubts and feelings of overwhelm, but these are not indications of failure. Franchising provides proven systems, processes and practices to help guide through the industry. There are additional tools like training, software and marketing assistance that can help a new location get off the ground. Ready to know if you're a good fit for a Real Property Management office? Contact us today.



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