4 common franchisor mistakes and how to avoid them

common franchisor mistakes

If you’re seeking to expand your business through franchising, watch out for common franchisor mistakes. Not every business is suitable for expansion via franchising. But for the right company, it’s a great way to expand the reach of your business and increase your income.

Many factors will affect your success at franchising. Is your business model easily replicated? Is your brand strong enough to generate business for franchisees? Carefully evaluate your business and be strategic in your expansion. Watch out for these 4 potential pitfalls. They are all-too-common franchisor mistakes.

Cutting corners on legal and sales advice

Failing to get expert legal and sales advice tops the list of common franchisor mistakes. Complex laws and regulations abound in franchising. Consult experts from the start to avoid headaches later. Don’t balk at legal fees or be tempted to cut corners on legal advice, which will help you build your business on a sturdy foundation. In addition, be mindful of all the sales strategies that franchising entails. There’s a lot to oversee, ranging from bringing on franchisees to attracting customers, maintaining their interest, and cultivating relationships over time. Working with vetted franchise sales consultants can be well worth the investment.

Failing to value your franchisees

Franchisees are independent contractors, so keep in mind that you’re not their “boss.” They’re investors who you’d be wise to treat as your equals. Be particularly careful when recruiting and avoid creating unrealistic expectations. Misplaced expectations can lead to unhappiness and, ultimately, the failure of a franchisee. Put time, money, and effort into building long-term relationships with your franchisees and realize the importance of keeping them happy. Disgruntled franchisees can hurt the brand.

Guarding your “secrets to success” too closely

It takes charisma and chutzpah to build a successful business. But many entrepreneurs severely underestimate the degree to which the success of their business depends on their personal involvement. Since you can’t replicate yourself, it’s critical to connect franchisees to the heart, soul, and spirit of your brand. The best way to do that is through great training resources. Offer franchisees immediate, easy access to a full suite of educational tools. Share with them your secret recipe for success, so they can replicate it.

Biting off more territory than you can chew

Plan your growth strategically. It’s wise to first expand into local or regional territories rather than trying to conquer the entire country all at once. Some savvy franchisors divide the map into territories to be managed by regional developers. The regional developers recruit new franchisees and provide support to developing units. With such regional experts on board, you can gain insight into regional and local demographics. This helps with more effective sales initiatives, marketing, and messaging.

If you’re looking to expand your business, franchising can be a winning solution. But make sure you take into consideration these common franchisor mistakes. Forewarned is forearmed.