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Should I worry that the franchise I'm interested in is closing some locations?

The franchise I'm interested in purchasing has lost 100 franchises over the past two years. There were 745 franchises in 2008, now there are 658.
This shouldn't cause you any more worry than if you were sailing on the Titanic's maiden voyage.

Okay -- seriously, this is very troublesome indeed. This franchise system has lost about 13 percent of their franchisees over the past two years. To make matters worse, this is a net number so if they added any new franchisees during that period then their loss percentage is even higher.

Without even knowing the reason for this amount of franchisee losses, you should walk away. It is probably a host of different reasons but that doesn't change the reality of all these failures.

There are lots of other franchises that don't have this sort of failure rate and you'd be a lot safer looking into one of them, especially in today's tough economic climate.

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