Businesses Do Not Fail, People Fail -
A lot of time is spent talking about “Franchise and Non Franchise Business Failure Rates”. It’s often said that various percentages of all businesses fail, or that the failure rate for franchising is X percent and the failure rate for independent business is X percent.
I’m going to suggest that “Businesses Do Not Fail”. People fail – to properly plan or execute their plan. Within any franchise system you’ll find people who are both failing and succeeding. The franchise system is the same, the people and the markets are different.
When one becomes a franchisee, the franchise unit becomes dependent upon the ability of the franchisee to successfully care for and maintain the business. The franchisee becomes dependent on their own ability AND the abilities of the franchisor to properly plan and execute the plan; vs. the single ability of the independent to plan and execute.
This double dependency can be both a benefit and a detriment. It’s a benefit from the perspective of ‘two heads are better than one’ or a detriment in - that if the franchisor does not have the ability to properly plan and execute - your survival is at risk. This interdependency is much like your body. You can have a healthy brain, lungs and liver but if your heart quits working the others will soon follow.
The first step in the process of becoming a successful franchisee is in self discovery and determining if you’re right for franchising. Assuming that you determine that you are, you must then determine what type of franchise you’re right for. This determination is to assist in selection of not only the concept, but also the level of training, coaching and support you require from your franchisor. Armed with this ‘self-discovery and needs analysis’ you can now begin to look at the opportunities that best match up with your own knowledge, skills abilities, strengths, weaknesses, threats, goals and ambitions.
As you begin to evaluate the opportunities you then must evaluate the viability of the various opportunities and weigh the franchisors ability to plan and execute their plan. You must look at their plan and determine how it meshes with your plan. If it appears to be a good overall fit, you then must begin to perform your due-diligence, your ‘validation’ of all that you’ve learned about their plan and their ability to execute both historically and into the future.
Assuming that after validation the franchise concept continues to ‘hold water’ you must then begin to incorporate their plan into yours and see how the two really work together. It is in this step that you begin to ask What If…What If….What If! You begin to play devils advocate. It is here where you’re going to begin to develop the contingencies for every situation, both positive and negative. Too many start-ups spend too much time planning for everything to go right, and when they go wrong the franchisee doesn’t know what to do. The idea behind planning is to say ‘okay, if this happens this is what I do’. You must answer questions like: if I don’t have a protected territory and the franchisor elects to grant another location within my service area how will my business be impacted. If the profit generated from a single location will not support the lifestyle which I want, will I have the resources to secure a second, third and fourth location? In the event that additional locations are necessary will I be happy managing multiple locations? Will the franchisor grant me additional locations? What happens if I run out of cash before the business becomes profitable? What happens if I’m unable to continue in business? It’s important that anyone considering a business venture spend two or three times the time thinking and planning about what they’ll do if things go wrong as they spend thinking about the new house, car, boat, or plane.
If the franchisors plan and ability to execute their plan meshes with your plan and your ability to execute your plan in unity – you may have found the right franchise concept. If not you must repeat the process.
Your business can not succeed without you, your plan and the execution of your plan. As a franchisee your ability to plan and execute will be dramatically impacted by your franchisors ability to plan and execute. If either of you fail to plan and execute in harmony, the business as a result is almost certain to fail.
FranSynergy provides both assistance in franchise selection and business planning services prior to and following the acquisition of a franchise. Whether you use our services, those of someone else or do it yourself, it’s imperative that you have a plan and properly execute the plan. Otherwise your franchise is like a ship without a course, nowhere to go and disaster a very strong probability.
Believe & Succeed,DaleFranSynergy, Inc.Synergizing Franchising!