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Avoid These Obstacles to Becoming a Successful Franchisor

Many a small business owner is urged by friends, business connections and customers to franchise his business. But the road to becoming a successful franchisor contains potholes not encountered in the core business. The key to success is being aware in advance of those yet-to-be encountered potholes and planning accordingly.

In fact, one of the top biggest mistakes, according to Brian Schnell, an attorney with Faegre Baker Daniels, is when a brand operator doesn't realize, from the start, that the business of franchising is very different from the core foundational business being expanded.

"Franchising is a different business, with many, many more differences than your initial business. One reason emerging franchisors don't succeed is that they don't master the franchise relationship that's required for success," he said during a panel session at the International Franchise Expo held May 31-June 2 at the Javits Center in New York.

Emerging, or start-up franchises, typically don't realize the importance of a happy franchisee – an investor that has made the commitment to run a franchise, added Schnell. An unhappy franchisee can hurt the franchisor and the brand if they aren't satisfied with the business relationship, he explained. — Judi Motti, Fast Casual

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