Franchising makes owning a small business easy. One buys into a proven business model, follows the instruction manual and, voila, presumably experiences financial success.
That’s the myth, anyway. The truth is that hundreds of franchisees fail each year. The most frequent causes: lack of funds, poor people skills, reluctance to follow the formula, a mismatch between franchisee and the business, and — perhaps surprisingly — an inept franchiser.
“A franchise is still a business,” says Lawrence “Doc” Cohen, owner of 24 franchised locations, including five Mrs. Fields Famous Brands LLC Pretzel Time outlets, and a former chairman of the Washington, D.C.-based International Franchise Association. “It’s not a guarantee of success.”
Here’s a look at some of the most-common mistakes that can befall franchisees — and what they can do to avoid them.
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