3 Tips for Happy Franchisees

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How often success or failure can be attributed to a bad franchisee?

It seems to have become popular to bash franchisors, but I believe that most of them are credible business enterprises, after all they have spent a lot of time effort and money to create a viable concept and business system and then they had to be scrutinized and pass regulatory hurdles, prepare a plethora of legal documents and then spend even more to promote their concept in a very competitive arena.

Because of this, it is possible that all to often in their desire to gain acceptance, they do not properly scrutinize and qualify their prospective candidates. I am sure that most zors survey their prospects for financial suitability, but I wonder how many test their prospects aptitude and personality for the field?

How many require the prospect to work as an intern under direct supervision of the franchisors for at least a week?

How many require the prospect to do their due diligence by preparing a business plan and cash flow analysis for the proposed location? 

A franchise creates a culture and as we all know, a few bad apples can spoil the proverbial barrel.

It's nice to think that you can formulate a system that will determine a good or bad franchise, but if you follow that logic, you never would have invested in Mc Donalds in its early years, after all the head of the company had been bankrupt and it was a relatively new and untested category and there was feuding and litigation between the principals of the firm.

Take responsibility for your success; in order to succeed in any new enterprise, it is important that you do your due diligence. That would include, but is not limited to: 

1. A realistic assessment of your financial capabilities; 
2. Demographics, including: site analysis, population density, income, traffic count and retail environment. 
3. Lastly, you should do a cash flow analysis to project how your assessment of these factors will translate into the business model you are considering and give you an anticipated outcome. 

Although the results will be hypothetical and will surely vary in reality, it will still serve to help you set your initial goals and give you a picture of what to expect from your new venture. 

Once you have completed these three steps, a picture should be emerging of your opportunity to succeed in your chosen endeavor.

Remember, the franchisor can only provide you with a system that has been successful in the past, train you how to use it and provide reasonable support, but it is up to you to make it work.

They cannot guarantee your success, nor should they; only if you have done your due diligence and are willing to put in the time and effort to make it work, will you succeed.


George is right about the early history of McDonalds.

I have always liked the idea of a franchisee being an intern for several months at a franchised location.

Be an excellent test to see if they actually liked retails sales.

You make a great point that McDonald's in the early years was likely dismissed as a fad or unworthy franchise investment by the "smart money".

Good points, the three steps are key to success.

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