Why do some franchises fail and some succeed?

Franchising in itself makes good business sense. There are thousands of people in the UK that have made it ‘big’ though franchising. You can easily come across success stories of franchises from all over the UK. However, there are many franchise businesses that fail to make it. What makes one franchise work and the one fail? There are a few basic reasons behind this:

Failure to adherence

Most franchise owners of the big successful franchisors fail as they do not follow the terms and programme of the franchise. It is very important to follow the systems and policies of the franchisor to achieve success as they have already been proven to work.

Inadequate resources

Some franchise businesses start without having the right skills, funds or experience in franchising. This will lead to failure of development a good franchise system. The franchisor does manage to attract potential franchisees but is unable to manage them properly. Most of these franchises fail because of the inefficient system.

Poor market research

Some franchises start off without doing proper market research. This is one of the most common causes behind the failure of any business, even franchising. For example having too many franchises in the same area would kill the business.

Lack of experience

Many franchises manage to sail through when the economy is good as there is demand for almost everything. However, in times of an economic slowdown, many franchises have to close their business as they cannot cope up due to lack of experience in managing tough times.