These Five Tenets are not abstract ideals – they are operational imperatives. A system that performs well on four of them will eventually fail when the fifth is missing – and the entire system pays the price.
Why do franchisors continue to outsource core franchise development functions to third parties when the tools to internalize development have never been more powerful, efficient, or scalable?
Franchise system failure is regrettable – but rarely shocking. When it happens, the fallout does not land solely on the franchisor. It lands on the franchisees who invested capital, sweat equity, and trust in a system that was never built to endure.
The expert’s function is not to manufacture opinions to fit a narrative, but to explain and contextualize the facts, serving as a translator between the realities of the business and the legal forum in which the dispute is being resolved.
Your goal is to ensure that your franchise system has the ability to consistently and sustainably replicate your brand standards from location to location.
Franchisors need to examine the cost benefit relationship of requiring frequent franchisee remittances vs. working capital benefits. Learn the types of fees, costs, and penalties generally included in a franchise system.
Field staff perform multiple functions in a franchise system; not only monitoring franchisee compliance, but also contributing to system growth far beyond completing a site visit checklist.
Regardless of the cause, the loss of any single franchisee-owned location should be viewed with concern by the franchisor, and should be analyzed to discover the reason and prevent future failures.
The criteria used in determining franchisability should be appropriate for your industry and business, and will generally fall into these interrelated and interdependent major buckets.
The franchise system you ultimately develop, and the franchisor/franchisee relationships you establish, are all shaped by the determinations your make in your strategic plan.
MSA Worldwide Franchising Resources & Library
