10 Reasons Leading To Failure Of Franchise Chain

As we all know, as early as the mid twentieth Century of 80s, the "KFC" and "McDonald's", which were popular in the world by franchising, settled in China. They brought the new concept of "fast food" to China, but also brought the new concept of "chain operation".

Franchise chain as a new trend in the development of business operation, its charm is gradually recognized by the Chinese people, but there are also examples of failure in the excellent chain. The 10 reasons that may lead to failure should arouse the attention of the relevant people.

Many people, after a long period of working life, have a certain amount of money and have the mentality of investing. They think that buying a franchisee will make money like investing in stocks and real estate.

Indeed, for those who do not have experience in operation, they can be trained through the training of chain headquarters, which is easier to enter in a shorter period, and the probability of success is greater.

This is the advantage of joining a chain store.

But no matter how excellent chain system, there are also examples of failure, if you think that once you join a chain store, you can easily sit on the value added profits, it is too naive.

It is impossible to ensure that all franchisees can operate successfully in one hundred percent place.

Take Mosburger in Japan for example, the Japanese are quite proud of their high success rate of 95%, but even so, there is a 5% failure rate.

The company chose the 1000 recruits from one year, and only 5% of them concluded the contract, that is, 50 people.

Although these 50 people have strong entrepreneurial intentions and have the same business philosophy as the head office, the final result is only 95% success rate.

From the many failed cases abroad, we can see that the most important reason for failure is the biased motivation of joining.

Once you join, you can lie down and do nothing. Everything is managed by headquarters.

The chain headquarters has a number of achievements that have been successful in its operation. However, an example of its successful operation by others (including headquarters and franchiser) does not mean that the operation will be successful locally by you and headquarter.

It must be borne in mind that headquarters and franchisees are two entirely different businesses. What the headquarters provides (Sales) to you is only a set of franchise operations. You must follow the experience and guidance to implement it step by step and effectively, so that you can succeed.

Two, when joining, the fund scheduling is abnormal. Because of the rush to start a business, some of the franchisees are everywhere to collect money, royalties and start fees, and even borrow usury.

Once the shop is open, although the business is still smooth, but every day in order to raise money to pay debts, it has no intention to fully invest in the operation of the business.

It should have been a leader in the army who would leave the front line due to the dispatch of funds, and other employees in the store would be affected immediately, so the service quality would gradually decline.

Customers are also sensitive, and slowly will gradually stay away from the store. Of course, the performance can not be further promoted. The shops that were originally good businesses often dragged down the whole business because of usury.

Three, not a few examples of failure to investigate in detail before joining.

Some of the franchisees do not know clearly about the chain headquarters that they will join. They always think they will join in first. Later, if there is a problem, the headquarters will naturally help to solve it.

As a result, after the opening of the store, there was no guidance for any business headquarters. There was no reply to the headquarters contact.

Specifically, there are mainly several types: 1. lacks basic knowledge of franchising.

Because there is no such knowledge, only in the relevant newspapers and magazines to see advertisements, call the past, after listening to each other's simple and heartfelt instructions, hurried to join.

It never occurred to me that joining so much capital and having so many bondage greatly reduced the enthusiasm of the work.

All this is due to the lack of knowledge about franchise.

This combination of misunderstanding will eventually lead to "breaking up because of knowledge."

2. only knows that this industry is good, but has not investigated the same industry.

At the beginning, I only saw the attractive conditions of the advertisement. I saw a beautiful company catalog and joined it in a hurry. However, I did not know that after entering the industry, there were more excellent enterprises in the same industry, more favourable conditions of joining and support guidance, and wanted to quit, but there was no way out because of "breaking the contract".

3. only visits profitable shops, but fails to shop more.

Before joining the company, although they also followed the advice of experts, they learned what kind of business the head office was doing. They also looked at how the franchisee managed, but general headquarters only took you to see a well run store and conceal unprofitable shops.

Only after joining, did I know that there were so many shops that did not make money while struggling.

In addition to visiting the successful shops, all of them heard how to relax money easily, but how rarely they started to shop, and how they could get through it painfully, they rarely mentioned that they had a false impression that success is easy to get by just joining.

4. has not visited the head office before joining, nor has he seen the head of the head office.

At that time, he proposed the wish to visit the head office, though the other side did not refuse, but it was far away from the distance, time and money were not economically shields.

Until joining the league, listen to other franchisees mentioned, only to know that the original company is simple, so I knew it would not be so hastily joined.

5. has never met and talked with the boss of the company.

Despite the request, he was told that the company is busy recruiting all over the country because of its recruitment of franchisees all over the country. Sooner or later, it will meet sooner or later.

As a result, on the day of opening up, the boss finally appeared and hurriedly walked away and talked with him. Only then did he realize that the boss was a man of few ideals and aspirations. In fact, he was at most a speculator.

Four, before signing the contract, many of the franchisees before signing the contract, or because the conditions of the contract are more favorable, or because they are afraid of being promoted, or think that early joining can save the joining money. If the contract content is not completely clear, or because the contract content is too complex and lazy to [FS:PAGE] solution, it hastily signed and sealed the contract, so there are many people who fail.

Five, he did not work hard to blame the headquarters, although he was the owner of the franchise, he did not want to run it himself.

Spending money to hire a store manager is not enough, but you want the manager to work for you from morning till night.

In addition, he did not make considerable investment and poor business performance, but blamed the headquarters for ineffective guidance. There was no practical know-how and method.

As a matter of fact, franchisees and headquarters are the fate community. Both sides need to make considerable efforts in their success.

If the franchisee thinks he is the boss who pays the investment, it will be too real to wait for the headquarters to make money for you.

"The competition shop has already appeared in this area, but the headquarters has no countermeasures at all." the site environment has changed, but the headquarters has not taught a way to deal with it.

Yes, the objective environment has changed, but are you able to reflect in time with your headquarters and add your observations?

If one does not make relative efforts, he is often doomed to failure.

Six, it is too confident about its own business ability. The franchise operation headquarters provided by the chain headquarters to the franchisee is not protected by the law as the general patent, so it is difficult to relate to the sense of value.

That is to say, the names, products and trust of customers provided by headquarters can hardly be measured by a standard yardstick.

The strength and know-how of the whole chain system are hard to see with the naked eye on the first line shops.

And it is difficult to determine the effectiveness of the franchise portfolio behind the success of the business.

Many of the franchisees made such a mistake: although they had received many help from the headquarters at the beginning of the shop, they neglected this point because of their hard work at the time. Once the performance was stable, they thought they were the fruits of their efforts. The so-called secrets and practical guidance of the headquarters had long been thrown away, and they thought that without headquarters, they could rely on their own strength.

As a result, the guidance of headquarters was reluctant to accept, and the headquarters orders were not willing to be executed, which did not match the promotion plans at headquarters.

Due to overconfidence, the franchisee gradually left the headquarters and failed.

Seven, joined the owner of a business and joined other businesses, and began to work hard in accordance with the guidance of the headquarters. The business was thriving, and the initial investment was recovered. So he began to look for other opportunities to make money.

Unfortunately, the new business didn't get the hang of it, so that all the money that came from it was lost, and the original store failed because of its inability to face both sides, resulting in a failure due to the inability of capital to turn around.

Eight, too fond of putting the boss on the shelf. Some of the franchisees used to be office workers. "For many years, a daughter-in-law is a wife". They always think that when they become their own boss, they must show the prestige of their bosses. For every employee's work, they must interfere with their work blindly, but do not know how to empower them, resulting in their employees' low spirits and affecting their business performance.

Nine, unauthorized changes in the operation requirements, some of the franchisees are familiar with the operation of the entire store. They will feel that some of the headquarters's operational requirements are not reasonable. If they are put forward to headquarters in good faith, the headquarters will be happy to accept them.

But if it is self assertion, there will be problems.

Especially in the case of goods sold in their own stores, if the change of manufacturing methods, or the time to change the processing time, or the order of changing the operations, so that all the provisions of the headquarters are ignored or not implemented, then the franchisee has actually lost the support of the headquarters, and has become a solitary force.

The operation rules of HQ headquarters must have their strong characteristics. If they are changed without authorization, they will lose their characteristics, especially in terms of quality.

Once the quality is unstable, once the characteristic is lost, the customer is very sensitive, and slowly away.

Ten, without the family's concerted efforts, joining the chain business must get the consent and support of the other half. If you can get the family's consent, including parents, wives and children, it will be better, because once these people are your backup forces, they will play a role of "help".

However, some of the investors who joined the investor were still desperate to join the family. They thought that as long as the headquarters was strong enough, it would be bad for a person to do so.

However, because of the opposition from the family at the very beginning, the relationship with the family would be bad. It would affect the mood, and this kind of emotion would often be reflected in the store, or when the family members were not enough, the family would not help, or sometimes they wanted to leave temporarily, but could not find someone to take over and become a "lonely person".

In addition, because the boss is really busy, he neglects many details, such as cleanliness and hygiene, and so on, which affects the operation of the store.

As the saying goes, "home and prosperity", "harmony brings wealth" is indeed very important.

This is why many of the world's convenience stores are asking for franchisees to be a pair instead of one person.

"Husband and wife cooperation and co operation" is a magic weapon for the success of store operation.