5 Franchise Problems To Avoid | The Startup Magazine


The US Small Business Administration notes that fast-food franchises make up the most popular business type for new entrepreneurs. Franchises are an easy way to trade on the popularity of an established name. From medspa franchise opportunities to retail businesses, there’s no shortage of supply. However, getting into a franchise relies on understanding what the company expects back from you. There are significant hurdles for new entrepreneurs when negotiating contracts and establishing rules between them and the franchisor. Here, we examine a handful of franchise problems that entrepreneurs should try their best to avoid.

A Terrible Sales Process

Many new franchisees are eager to get people in the door, regardless of how successful those people are likely to be. When you’re selling a franchise, whether it’s fast food or retail, the operator needs to understand how to make it work. While established franchises have massive training programs, these smaller, newer franchises don’t. They’re a lot cheaper to buy into as a result, and the low cost attracts a short of new entrepreneurs. The downside is that these new business owners end up biting off more than they can chew. Restaurant Business Online underlines this problem in their case study of Quiznos’ collapse.

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