Why franchises fail?

You just bought a franchise of a really famous company hoping to make tons of money. But in contrary to your expectations, you just end up losing some more. But why did that happen? Why did this franchise fail? Even though you knew that the company was a famous one. Here are some reasons of why sometimes the franchise fails-

1. Nothing is constant-You may be very enthusiastic at the initial stage of your business but then you have to remember that things will change. You have to communicate constantly with the franchisor to make sure that there is no misunderstanding and you both share the same view.
2. Unability to understand finance-A 4 hour of induction on finances is not enough. You won’t be able to understand the entire financials of the business in these 4 hours. You may also be unfamiliar with financial jargons used by franchisors. The best you can do is to seek guidance from experts and specialists (of franchises).You should always focus on independent advice in case of buying a franchise.
3. Don’t overspend-You all should know that overspending in times of plenty can backfire.Dont overspend to create additional financial burden. It will make your business harder. You have to take care of future financial commitments. Just understand the business cycle well in advance. One of the early warning signs that financials are not balanced is an inability to pay royalty fees. If this happens, you should immediately create an action plan.
4. Difference in selling and marketing- Your franchisor may provide you with the best marketing tools in this universe to promote the brand but then sales are up to you. You have to focus on improving selling techniques even when marketing is awesome.
5. A planned business-Business discipline is a must. You should have a planned structure to run the business. Your duty is not simply to keep up with daily routine operations. You have to improve every day. If you are new in business field and want to gain some experience, then seek expert help. But be innovative.

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