After you've talked with a number of franchisors you may begin to wonder why any franchisees fail. But they do, and franchisors are usually tight lipped about it unless the franchisee is clearly at fault. I find it hard to accept their silence, and it is all the more reason to exercise caution. The less potential for risk the greater the opportunity for success.

Franchisors have never been overly generous with information that could be classified as sensitive. State and federal laws have made them "gun shy" and rather than tell a prospect too much they attribute their silence to strict governmental regulations.

The Treadmill Franchisor

This is the franchisor that is going nowhere. It will never make it to the "big time." For a while the number of franchised units in operation will rise and fall like the ocean tides. Over time, however, attrition and disillusioned franchise owners will prevail while the franchise program whithers away and dies.

You can recognize a treadmill franchisor by its lack of purpose and direction - no well defined plan for growth and development. It's management is sorely lacking in the most basic skills and the solution for every problem begins with the incompetency of the franchise owners.

The Good Hands Franchisor

These are the good guys. They are the ones you want to deal with. There are no pretenses, excuses, or hard sell tactics. What you see is what you get is a practicing philosophy. They don't sell franchises, they award them. It is your job to sell them on you. They are building for the future, want only the best people in the system and will turn down any prospect who does not measure up to their standards.

These franchisors have it all together - the people, the resources, and the desire to make their franchisees successful.

The X-Rated Franchisor

These are the ones that give the industry fits. Their motivation is greed. The franchisee is just one big dollar sign to them. They have no qualms whatsoever in telling a franchisee, confidentially, about all the money that can be made and how easy it will be to open multiple units.

By and large the operational people are used for collection purposes. They see to it that all royalties and other charges are paid on a timely basis. Delinquents pay interest and are usually threatened with a cancellation of their franchise agreement if late payments continue.

Labels: Franchise Opportunity