The 6 Most Common Franchisor Mistakes Too many entrepreneurs start the franchise journey without being fully prepared.
By Kyle Zagrodzky •
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Franchising has a special lure that entices a lot of entrepreneurs. After all, if you have a fantastic idea or already established a successful business, why not make it even bigger and better by turning it into a franchise?
The problem is that scaling a concept into to a successful franchise involves a lot more than an uphill climb. Building a franchise is more like trying to summit Everest, and too many entrepreneurs start the journey without being fully prepared.
Related: The 9 Advantages of Franchising
In the saga of turning a concept into a franchise, there are plenty of pitfalls, but most entrepreneurs tend to fall into the same traps and make the same mistakes. The good news is they're avoidable if you plan ahead, use resources wisely, and work with the right people. Sounds easy enough, right?
Having a scattered or unclear brand.
You'd think that clearly defining your brand would be the easiest step of franchising, but it's often the objective where most entrepreneurs miss the mark. Entrepreneurs are "big idea" people, and sometimes it's hard to contain those ideas into a single, streamlined, clear, meaningful brand. A lot of entrepreneurs think other people just don't "get it," but a great concept -- one that actually sells -- is always simple enough to understand easily. Here's the ultimate test: If you can define your brand in six words or less and complete strangers understand immediately, you're good to go. If you have to deliver an elevator pitch just to carry your idea across, you have to focus on clarifying the message.
Relying on bad legal advice.
Most people dread dealing with legal issues, but if you're going to develop a franchise, having quality legal counsel (and being prepared to foot the bill) is non-negotiable. We all want to invest in resources that will nourish the business, but business owners tend to balk at legal fees. Entrepreneurs looking to franchise should never cut corners on legal advice, especially in the growth stages when every legal decision is crucial. Don't think of top-notch legal counsel as money down the drain -- think of it instead as a fundamental requirement for building your business on a sturdy foundation. Cheap or inexperienced legal advice may seem okay not, but it's akin to building your entire business on a sinkhole that is more likely to collapse.
Related: Pitfalls People May Face When Buying a Franchise
Not sharing the "secret sauce" with franchisees.
Entrepreneurs are charismatic, and when they've built a successful business and start considering franchising, they often severely underestimate how much of their personal touch makes that business thrive. To win on a massive scale, a franchised company has to be duplicable, but you can't replicate yourself. Franchisees have to feel connected to the spirit of the brand, and the best way to do that is through great educational resources. Offer franchisees immediate, easy access to a full suite of educational tools that will show them the recipe for your secret sauce so it can be recreated in every unit.
Being inflexible when change is necessary.
Lots of entrepreneurs refer to their business as their baby, and with good reason. Companies need constant attention and care, and that kind of effort can only be delivered when we're deeply passionate about a concept. However, passion can lead to tunnel vision, which makes it hard to listen to advice when something about a brand needs to change. It's hard to know when to stick to your original idea and when to accept that something needs to be tweaked, but it's also important to listen. Be passionate, but not rigid. You don't have to run with every idea that comes along, but if you get consistent feedback, be open to letting your brand develop.
Related: Expensive Mistakes to Avoid as a New Franchisee
Failing to define your territory.
Franchises are designed to be big, but it's healthier to build strength according to a plan than to try to lift two hundred pounds on your first visit to the gym. Instead of trying to conquer the whole country or the globe in one stroke, break the goal into manageable pieces and learn to delegate. Savvy franchises are broken into territories that are managed by regional developers who can recruit new franchisees and support developing units. Dividing growth into territories also helps the business gain better insight into regional and local demographics that lead to tighter sales initiatives and more refined marketing and messaging.
Listening to bad sales advice.
Franchising has created a whole new arena of sales theory and tactics. There are so many layers to selling a franchise, and it's hard for most franchises to keep up. From bringing on new franchisees to catching a customer's attention, keeping them interested, and maintaining relationships over time, there is a lot to oversee. Working with vetted franchise sales consultants takes a lot of the pain and strain out of every facet of franchise sales, and just like partnering with great attorneys, it's well worth the investment. Whether a franchise is just getting ready to launch, is in the middle of a growth stage, or needs a fresh breath of life, franchise sales experts can provide the right insights and energy to help brands achieve sales goals at every stage.
