With all the great benefits franchising brings several opportunities for you to grow and empower your business. Unfortunately, the new franchisors make some common and significant mistakes that lead to abandoning their franchise expansion programme even in the initial stage itself.
If you are one among them who are going to start new franchising, here are some common mistakes listed by the experts so that you can avoid them when starting your franchising.
A Few Mistakes Made By New Franchisors
1. Franchise Before Having Proven Concept
The business should have an established track record along with proof of profit potential before the franchising is considered as a means of expansion. This will make you confident about the successful business without getting worried about the loss.
2. Becoming Greedy
Royalties on sales are the profit driver in franchising which multiplies as the network grows. The chain of profits from product supply cannot sustainable because it is not legally enforceable in terms of the Competition Act & Consumer Protection Act. Moreover, the role of the franchisor should be to get franchisees at the best possible price on product supply which turns out to be beneficial for the business. On the other hand, becoming greedy and trying to make additional money, unfairly from product supply and acceptance of rebates instead of driving the price down can down your reputation.
3. Not Conducting A Full Site Evaluation
The franchisor is not at risk, they don’t conduct a full site evaluation. But, failure of the franchise would reflect negatively on a franchise image with banks and property owners. It is, therefore, necessary to have site assessments are done properly for every outlet to avoid franchise failure because of a bad location.
4. Focusing Only On Franchisee Training
Several franchisors focus on operation training while business management training plays a critical role to ensure you are capable of managing your start-up business. The initial training is related to the operations which cover the aspects of franchise business although the management training helps to manage your business profits and loss. If your business concept is not up to date, the chances of loss are there.
5. Implementing Poor Marketing Strategies
A valuable brand is one of the main that drives profits to your business. First of all, invest in brand development and marketing as the competition grow, consider involving marketing efforts that franchisees expect for the growth.
6. Poor Communication
Let people know about you and how you are beneficial for them so that you can grow your business. Use all modes of communication in an effective way to attract new customers. What feedback you get from others, take it seriously to improve your business. One of the best ways is conduct regular franchisee satisfaction, surveys, etc.
For new franchisors who want to avoid these mistakes can get the assistance of experts having vast knowledge and experience in this industry.
At Ismail Alptekin Business Developer, we support small businesses on how to invest and achieve market goals. To discuss your project requirements, feel free to contact our professionals.