Do you know why entrepreneurs are rushing to start a franchise business? The answer is simple, their success rates back them up. According to Katie Fagan, a franchise consultant for FranNet, a franchise consulting group in San Jose, “The No.1 reason businesses fail is lack of cash for working capital. After 10 years, only 16 percent of existing start-ups are still in business. With franchises, it’s 90 percent.”
The success of a business is usually measured by its survival in the business world considering the tight and aggressive competition. With the 90 percent survival rate of franchising, it’s easy to see why entrepreneurs are fascinated to jump right in the franchising bandwagon.
But do you know that although these statistics speak for itself, in reality not all franchising businesses last. Just like any other financial venture, franchising also comes with its fair share of risks.
So whether you are looking to franchise a gym, a food joint or an air conditioning cleaning company, we suggest you contemplate on these pieces of insightful advice before you start singing papers.
The following are 3 mistakes franchise partners make and how to avoid them.
- Potential franchise partners look at awards; rankings and good press exclusively as measures to a successful franchise.
While it’s true that awards help build a business up, it shouldn’t be the only reason for you to be a part of it. According to Sean Kelly, a publisher of UnhappyFranchisee.com, “Stacks of article reprints and accolades from the entrepreneurial press is often more of a testament to the aggressiveness of their PR efforts than to the strength of their franchise program.”
Looking at awards as the reason to open a franchise is clearly not enough. As a matter of fact, it could be disastrous. Realise that all companies are doing their best to market their business and awards are merely a testament of their marketing efforts. If you want to know whether or not a particular franchise business is a good investment, do more research other than looking at their awards.
- Potential franchise partners fail to seek out complaints online.
It is unwise to know about a business based on what their website says. Of course if you are browsing through their website all you’ll read are positive posts that encourage you to be a part of their franchising business. If you really want to know whether or not a franchise opportunity is the right one for you, you need to start reading discussion sites and forums where existing franchise partners vent their complaints and disappointments about the business. These are real and unbiased stories coming from real people and you could learn a lot from them.
- Potential franchise partners expect complete autonomy.
If you want to be your own boss then perhaps you should rethink opening a franchise. It’s true that you can manage your own business but once you are a franchise partner you are required to follow rules to ensure the success of your business.
A franchise model requires franchise partners to adhere to the rules because these rules are the reasons why the business is a success. If you want to do it your way and follow your own rules then you shouldn’t buy a franchise. You can avoid this by setting the right expectations and by understanding that once you become a franchise partner you are obliged to follow a set of rules for your business’ success.
If you are currently looking for a franchising business that can give you promising results we encourage you read about HydroKleen.
HydroKleen is a great business opportunity if you are considering opening a franchise. HydroKleen is an air conditioning cleaning company based in Australia. Our franchise partners are growing by the minute and are sprouting like mushrooms all over the globe. We started franchising in July 2010 and since then we’ve introduced HydroKleen to over 13 countries and branded itself into over 40 countries all throughout the world in just a short span of time.
But before you make your decision, we highly encourage you to follow our advice in this blog post. Do you research, look beyond the awards, read complaints or ask our existing franchise partners about HydroKleen and understand the nature of a franchising business.