The other half

Unfortunately, the large majority of my initial calls with prospective Franchisors aren’t quite as exciting as the one described above. The fact is, we regularly receive calls from business owners that have no reason to consider franchising their business, and many start by immediately asserting the fact that their business is either, new, struggling, or not even opened yet, but that they think their current or future business will be the next great American franchise.

Because franchising is consistently reported as being such a hot industry, it tends to give the impression to would-be Franchisors that it is much, much simpler than it sounds to become a franchise powerhouse, and many equate the “build it and they will come” mentality with the franchise industry. It is quite concerning how many business owners and opportunists assume that any business can be easily franchised and replicated by the hundreds into successful units.

The most shocking are the prospects that call with an idea, a concept, or reference an industry that they think might be experiencing high growth and that they want to start both their first location and the development of their franchise simultaneously. Some don’t have an interest in opening even one location, instead they take confidence in their business wisdom to create a winning operational and competitive business conceptually, and expect Franchisees to come calling to buy their share of the magic. Imagine being a franchise prospect and being solicited for a franchise that has either no locations or only recently began in business.

The sad truth is there are numerous operators doing just that. And while, I am not suggesting that it is impossible to do this, particularly in established industries, it is more likely that unless the originating business owner is a superb business strategist, the model and the franchise will not flourish and will likely suffer from the same dangers that threaten all businesses.

Additionally, prematurely developed and occasional fraudulent franchise development has largely led to most of the current franchise legislation and regulations Franchisors are forced to navigate today.

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