The Disadvantages of Franchising

In the last of our three-part series on the advantages of franchising, we thought it would be extremely useful to look at the disadvantages.

Like with all important decisions, it is a wise idea to weigh up both sides to ensure that you are fully aware of what you are getting yourself into.

woman explaining contract to a man

Being held accountable

Losing your autonomy can be scary for some when going into franchising. Rather than changing plans, business models, and rules whenever you like, your group of franchisees will scrutinise you for every decision you make. If you are not delivering on what you have promised them, things can turn sour very quickly.

Systemising the business can be a long and tedious task

Systemising your business so that you are able to franchise is not something that you can do straight away. Putting systems in place and doing all the paperwork that you can hand over to franchisees can take on average between 50-130 hours. Depending on your current schedule or workload, this could take weeks, or even months to achieve. And when you are used to having all your knowledge inside your head, getting it all out on paper for others to read can be much harder than it sounds.

This can be off-putting to many, and without a plan and routine to get things done, you may not reach the finish line. You can always enlist the help of someone who has the experience, so you can get the job done.

man checking his business chart and schedule

Not wanting to let go  

Being a franchisor means being able to delegate work and have your franchisees manage the day to day running of the business. The franchisees have bought into the business because they are ambitious and want to succeed, but they aren’t able to do this with someone breathing down their neck all the time. Sure, you will need to be there to make some of the big decisions, but if letting go and putting trust in your franchisees is not something that you feel that you would be able to do, then franchising might not be the right step to make.

Less freedom to make changes

When you have a standalone business, it is easy to swap products in and out, try new marketing initiatives, or even complete a whole rebranding. But when you have a handful or even dozens of franchisees across your business, a lot more consideration, time, and planning is involved. It doesn’t make sense for one outlet to have different products and promotions from another, as this confuses and loses the trust of your customers.

Be on call support for your franchisees

While your business model will be in place, it is likely that your franchisees may need some hand holding while they get up and running – especially if it is their first time running a business. If you are someone that lacks patience and empathy, then this may be a struggle.

Stepping into the world of franchising can be highly advantageous when done in the right way. If you feel that you will be okay with losing your autonomy and becoming more hands off, while still being there to support your franchisees, then it might just be the right step to make.

If you are ready to make that first step on your franchise journey, feel free to contact us here.

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Our quest is to continue to help business owners who want to grow their business into a more valuable asset through franchising. The team of expert advisors at Franchise Simply does this this through our simple four step Franchise Success Path which can be delivered in many different ways to suit you. We work closely with our team of leading franchise experts to provide the full range of services to the franchise industry, from carefully crafted legal agreements and operations and procedure manuals, to expert advice on corporate structures, fee structures, territory planning, franchisee support, recruitment and much more…

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We believe in giving back and so a percentage of every program is given to MicroLoan Foundation Australia to help women in Southern Saharan Africa to build businesses and take their families out of poverty. To date we have helped provide over 28,000 loans impacting on 150,000 impoverished people.