{"id":1696,"date":"2017-08-24T16:04:53","date_gmt":"2017-08-24T16:04:53","guid":{"rendered":"https:\/\/www.thefranchisemaker.com\/learningcenter\/?p=1696"},"modified":"2025-01-09T19:11:30","modified_gmt":"2025-01-09T19:11:30","slug":"dangers-of-franchising-your-business-too-soon","status":"publish","type":"post","link":"https:\/\/www.thefranchisemaker.com\/learningcenter\/dangers-of-franchising-your-business-too-soon\/","title":{"rendered":"Dangers of Franchising Your Business Too Soon"},"content":{"rendered":"

This\u00a0might be hard to do, but imagine<\/em> you are looking to buy into a franchise.\u00a0You find something that looks promising and you buy into the\u00a0concept. As a new franchisee your\u00a0expectations are that you are\u00a0buying into\u00a0a program that is already figured out.\u00a0You are under the impression that\u00a0all you really have to do is learn all the secrets such as: best ways to operate the business;\u00a0best practices for\u00a0hiring and\u00a0training employees; and (most importantly) how to\u00a0make money\u00a0(just to name a few).\u00a0<\/span><\/p>\n

You are\u00a0soon disappointed because you quickly realize that the people who you bought the franchise from don’t know any more about these things than you do and subsequently aren’t much help.\u00a0It becomes clear this business should have never been franchised in the first place (read more about us<\/a> and why our President started The Franchise Maker to prevent this type of thing from happening)\u00a0because the franchisor doesn’t even have their own business figured out.<\/span><\/p>\n

Now back to real time. You are excited about wanting to franchise your business<\/a> and maybe you even built your concept with franchising in mind. So\u00a0what are some of the reasons not to franchise which would indicate that franchising is premature (see our article on this topic,\u00a0“Disadvantages of\u00a0Franchising<\/a> When You’re Not Ready: Top 5 Reasons NOT to Franchise”)?\u00a0You sure\u00a0don’t want to end up like the franchisor in our imaginary scenario.\u00a0Let’s explore\u00a0some of these reasons\u00a0now.<\/span><\/p>\n

What Makes It Too Soon?<\/span>\u00a0\u00a0\u00a0\u00a0<\/span><\/h2>\n

If you haven’t mastered every aspect of how to operate\u00a0your business yet, then it is too soon to franchise. Besides mastering operations, you need to have the experience under your belt of dealing with the headaches, challenges and everyday problems that arise as\u00a0you are doing\u00a0business. It’s necessary that you have gone through such things because as a franchisor your role is to mentor and guide\u00a0your franchisees when they have similar challenges. So, if you are a newer business and\u00a0haven’t been operating your business long enough to have a full cycle of seasons under your belt it is too soon to franchise (for more on what to bring to the table in order to start franchising visit our Frequently Asked Questions<\/a>). You need to know if there is\u00a0seasonality to your business. Maybe there are significantly slower times\u00a0in your business you did not anticipate that catch you by surprise. How do you compensate for these slow\u00a0times?<\/span>\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n

If you want to franchise an idea\u00a0or just launched your business it is likely you lack proof of concept (an exception might be that you have been in the industry and have operated similar businesses close to what you are wanting to franchise). You may think that you have proof of concept but in reality what you are thinking of\u00a0offering might just\u00a0be a fad and doesn’t have\u00a0much of a\u00a0lifespan (see our article, “Does a Business Need to be in Operation Before Franchising<\/a>?”). The bottom line is franchisees are expecting you to teach them how to be successful\u00a0and if you\u00a0are just starting out\u00a0then you have not really figured it out yourself. And if you are looking to franchise because you are struggling and want to make more money…well that leads to disaster. It makes no sense to franchise if your own business is not doing well.<\/span><\/p>\n

Disgruntled Franchisees<\/span>\u00a0\u00a0<\/span><\/h2>\n

Franchisees not only invest their time, energy\u00a0and resources (including leveraging their assets)\u00a0but\u00a0also change their\u00a0lifestyle to jump into a franchise program. So it is not unrealistic that franchisees expect that you have all the answers and you will lead them down a path to help them be successful. When that doesn’t happen franchisees feel disgruntled, cheated, misled and defrauded. And honestly they are right.<\/em> Who is to blame them? Franchising is regulated to protect the consumer (in this case franchisees)\u00a0against fraud. As a franchisor it is your<\/span> responsibility to have a well-developed system and continuously\u00a0generate a community-of-interest for your brand. If you don’t have a well-developed system that encapsulates every aspect of your business (learn about our strategies when building franchises<\/a>)\u00a0and you end up selling someone a franchise; then you just gave that person a reason to claim fraud.<\/span>\u00a0\u00a0\u00a0\u00a0<\/span><\/p>\n

This is not to say that you must have every single detail of your business\u00a0completely figured out and there is no hard definition\u00a0for what is considered to be “operational success”. You can use franchisees to test market a service or product\u00a0later, but the meat and potatoes of your business must be already figured out.\u00a0 Problems\u00a0arise when\u00a0a franchisee has been misled to think they are buying into a solution that will lead them to success and it turns out to be a joke (like our imaginary example).\u00a0You could be sued for fraud and once peoples’ lives are destroyed, they might seek revenge, retribution and retaliation which all\u00a0leads to litigation. All of which harms you, your franchisees, your reputation and your brand.<\/span>\u00a0\u00a0<\/span><\/p>\n

Operations All Figured Out\u00a0<\/span><\/h2>\n

If you want to avoid the dangers that could come with franchising your business then make sure to heed our advice. Learn your business cycles and how to stay afloat during slow times. Know how to attract business, generate revenue, deal with employees and be prepared to share your trade secrets on hiring and retaining people. No matter how badly you want to franchise, don’t end up like the franchisor in our imaginary scenario. If after reading this you feel you have these elements figured out, then we encourage you to give us a call at 1-877-615-5177<\/strong><\/a>. We will gladly answer all your questions and determine if you are really ready to franchise your business.<\/span><\/p>\n

\"BBB<\/a> GET STARTED!<\/a> <\/p>\n