Top #4 Mistakes That you Should Not Make When Franchising Your Business

You may think of seeking help of a franchise consultant to get an in-depth domain knowledge about the concept

Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

When it comes to franchising, the good news is that if done strategically, keeping in mind a few rules, it works well. To attain a realistic franchise launch goal, there is a step-by-step process to follow and some mistakes to avoid.


To understand the mistakes you must first know what it means to franchise your business and then engage in a franchise development process focused on specific, realistic and attainable goals.

Entrepreneurs with in-depth knowledge on franchise model of business share the following most common mistakes made by entrepreneurs.

1. Confusing the Roles of Franchisor and Business Owner

As the business owner, your job is to dish out mouth watering delicacies; you excel in it and you end up having loyal customers. Soon, a prospective partner comes with an offer of a franchise and you jump at the first opportunity as if it is an ace in the hole. Unfortunately not always!

“Being a franchisor and a business owner are different ball games,” said Saugata Banerjee, restaurateur with two successful brands and more than 10 franchise units. “You may be a connoisseur of good food and drinks, but that doesn’t necessarily mean that you will also be a grand franchisor,” he said.

To find and recruit franchisees is a painstaking procedure. “Methods need to be put in place, guidebook needs to be drafted and franchisors need to train franchisees and other resources,” added Banerjee.

You can also think of seeking help of a franchise consultant to get an in-depth domain knowledge about the concept.

2. Lack of Planning

Planning is key to any initiative and a successful franchised business is no different. “Franchises need a lot of contemplation and prior planning,” said Banerjee. He advised to create a comprehensive instruction booklet for the business. It should narrate, in a step-by-step pattern, all the processes and rules of your company, before taking into consideration the business model. “Don’t ever imagine you can do it on a trial method and see how it goes later,” he warned.

3. Franchising too Soon

Not all businesses are franchise worthy and even if they are, you may not be ready yet. In franchising, it is often not the best product or best service that wins, but, the franchisor with the best execution, takes away the cake. The fact that your six-month-old Chinese restaurant is doing great every day doesn’t mean it is time for you to consider franchising your brand.

Debaditya Chaudhuri, Founder of Chowman, a chain of Chinese restaurants, suggested waiting for at least two to three years before taking into account the idea of franchising. He also considers it important to suitably assess the business models and potential competitors in the franchising marketplace.

“You must get everything sorted,” he shared. “No one will be keen to buy your franchise if you haven’t yet settled the knots and loops,” he added.

4.  You're Under-capitalized

This one gaffe occurs in franchising and in all businesses. Often startup franchisors misinterpret the Franchise Development Process (FDP) as having their Franchise Disclosure Document (FDD) prepared for. This results in failure of accurate planning of a budget for the development process as well as for the post-launch franchise sales procedure.

“In the absence of correct budget, planning and target, there will only remain a legal document titled FDD, which will not be of much use,” cautioned Bikas Saha, Owner of Kasturi, a renowned restaurant chain catering to Bengali cuisine.

He advised startups to plan the budgeting requirements for the development and the post-launch process. “Franchising being an utterly scalable idea and you cannot roll out a franchise system in hurry. Draft the right plan and the strategy for the next five years,” concluded Saha.