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Tips For Dealing With Obstacles In A Franchise


December 5, 2019
Tips For Dealing With Obstacles In A Franchise

One of the main reasons why franchises fail is an inability to overcome obstacles. Be it cost, unsuitable employees or straying too far from the business plan, franchise success rates are hindered only by those unwilling to use readily available resources to conquer challenges.

If you’re searching for reasons why franchises fail, look no further than how they tackle obstacles.

Challenges will crop up in any business, regardless of whether it’s a franchise or an independent enterprise. You can’t simply rest on your laurels and expect the franchise system to reward you just for taking part.

While last year 93% of franchisees claimed profitability, indicating that the failure rate for franchises is 7%, this is largely thanks to a thorough selection process and peerless support network.

Should you choose not to tap into that network and instead meet obstacles without preparation, you may find your career in franchising cut short. However, if you’re interested in tackling challenges properly, read on to discover the most common problems a franchisee faces – complete with our strategy for solving them.

Understanding the cost

As with regular business failure, cash flow troubles can easily destabilise the franchisee and send them spiralling downwards. A large proportion of your finances should have been forecasted at the onboarding stage when you presented your business plan. If you’ve found that you’ve not stuck to your predictions, investigate your spending.

Inventory and stock are both more affordable thanks to franchisor relationships. You should be provided with lists of preferred suppliers and therefore can limit expenditure through mutually beneficial rates. If you’re uncertain which providers are considered more affordable, ask your fellow franchisees or the franchisor directly for recommendations.

Similarly, monitor your marketing budget. Your franchisor should be able to help you communicate the brand message. A quality franchisor may even have a marketing department that can help tailor your messaging to be more attractive to your audience.

Money is easily misspent on outreach, so be sure to consult with the marketing team prior to each effort, taking full advantage of their training and support.

Finally, don’t spread your services too thin. If you’re a travelling franchisee and use a vehicle for work, build up your territory instead of seeking work across county lines. The problem with franchises that do try this is that the quality of work often suffers, making it harder to gain a sustainable foothold.

Employing the wrong people

Speaking of sustainability, don’t simply hire for its own sake. A franchise can be a risk-free solution – provided you don’t throw any cats among the pigeons. Hiring an employee who has little ambition and isn’t interested in your franchise’s ethos is one such cat.

You won’t contribute to the positive franchise success rate if you hire team members who are only concerned about furthering their own aims. If they’re to be successful employees of a potential empire, they have to understand the connection you have to the franchisor while simultaneously working for you.

Your franchisor should be able to provide blueprints of how other successful franchisees have grown. Training is important here as well. Any skills that your franchisor taught you need to be reiterated to your employees. For bigger franchises, this training will likely be standardised – and it’ll be your job to adhere to the outlines provided when administering it.

Franchisee failure occurs when you either employ those unable to follow your instructions or you fail to effectively deliver said instructions. For the sake of your franchise opportunity, as you grow, you’ll need to work tirelessly to prevent both.

Sticking to your business plan

Successful franchise models will insist you have a watertight business plan before you begin working with them. These organisations will expect you to present this in the early stages of your relationship, and it will form the basis of your overarching goals.

What makes a franchise more secure than a business, in this respect, is how involved your franchisor will be in the creation of your business plan. Every eventuality will be considered, with a wealth of other franchisees’ experiences to justify the validity of certain arguments or suggestions.

This is why it’s so imperative that you follow your business plan to a T. If, at any point, you believe yourself to be straying from what was initially agreed, you need to consult your franchisor. Pull too far away from the brand’s vision, and audiences may reject your offering and you’ll likely fall out of favour with HQ.

If you feel that other franchises that have failed have done so due to lack of individuality, ask your franchisor where you’re able to differentiate your tone of voice from that of the parent brand. It may be that social media is a platform for you to trial targeting other audiences.

Maintaining a work-life balance

Starting up a franchise business will take up a significant amount of your time. This is especially true if the franchise business consists of you alone. What’s important is that you sustain a healthy personal life that leaves you feeling physically able to drive your franchise forward.

It’s hard to stay engaged if you devote yourself 110% to the franchise. It isn’t conducive to a successful operation and often only results in franchisee fatigue and a tense relationship with the franchisor.

You got into franchising so you could be your own boss and enjoy your freedom from the rat race – the more time you take to reflect, the better a leader you’ll be to the employees that you do hire.

Being inspiring does not always mean being the first one in and the last one to leave. Sure, you should set an example of what good looks like, but don’t exhaust yourself in the process. Otherwise, employees may believe they’ll be met with highly demanding roles and less freedom themselves as they progress in your franchise.

How Rainbow help you succeed

Still, asking yourself why do franchises fail? Speak to us. At Rainbow, we believe that franchising is one of the best avenues to success for the commercially savvy. Not only do we cultivate your forward-thinking mindset, but we also provide you with the training to become self-sufficient in your role.

Get in touch now and be guided through our entire business model by a member of our onboarding team.