Top 10 Challenges Faced by Franchise Owners

Opening a franchise is surely a beneficial way of getting into a new business. You might have heard lots of benefits to opening a franchise despite the company and product you choose. But, that does not mean franchise owners do not face any challenges. Not all franchisee owners are aware of everything regarding the franchise procedure and business operations.

So, the challenges a franchise owner faces are a continuous process even after opening a franchise. This is because many people have tried opening a franchise but, were highly unsuccessful because of the challenges they faced. Further, in this article, we will talk about some of the common challenges faced by franchise owners across the world.

Acquiring capital 

Stepping into any profitable business is surely not an easy task. When a new franchise is opened, the first year for the business is the toughest of all. There are lots of financial hurdles faced by franchise owners. Now, the working capital required for any business is not the same they differ as per the industry, product, location, and demand.

Before selecting the right business the total capital must be present with the franchise owners. Not all owners can gather the required capital for the business franchise they choose. This becomes a big barrier for franchise owners even to start a franchise business of a particular company. Normally, franchise owners face a shortage of budget and that can include office rent, supply, electricity bill, labor costs, and many more. 

Impractical expectations 

When businessmen have chosen a brand and have set up a new franchise, surely franchisees sigh with relief. We all know, operating a business even if it is a franchise is not so simple. Franchise owners might think that there will be less work and more profit but, that will not be the case practically. There will be a lot of work, franchise owners will need to put a lot of time and effort into the new business.

Yes, a franchise business may seem an easy and ready-made business model but, there is still a lot to figure out for all franchise owners. In some cases, franchise owners need to conduct a lot of groundwork for the smooth operation of the business franchise. 

Choosing the Right franchisor 

Just like we have difficulty in choosing the food item in a restaurant that we want to eat at, similarly businessmen willing to get into a new business face this problem. Choosing the right franchisor can be a very big mess for franchisee-seekers. Many people willing to start a new franchise business confuse themselves about which franchisor to choose.

This is because in today’s market lakhs of companies are offering franchise options to the public. While offering a franchise business option they tend to promise lots of unique features and benefits to the one willing to open one. This is where the normal public gets confused and wastes a lot of their time and effort. Moreover, choosing the right franchisor is surely a hectic job for most franchisee-seekers. 

Franchisor support 

Not all franchisors today offer what they promise to offer to the franchisee owners. There are a lot of cases where lots of unimaginable things were promised to franchise owners after they choose and start a particular franchise, but, the parent company did nothing. So, it becomes quite hectic for franchise-seekers to choose the right franchisor who will help them from the beginning to finally setting up the franchise.

When an individual has opted for a particular franchise, it becomes the duty of the parent company to offer full support to the individual. This way the company will retain employees and franchise owners from the market. Other than that, it might get a huge customer attraction from the market. Moreover, one of the major challenges faced by a franchise owner is the unavailability of a support system from the parent company. 

Location availability 

Not all franchise owners can give the best location to the parent company. Now, most reputable franchisors ask all franchise owners to offer them a highly demanded location. Getting a high demanded location is not a cup of tea for everyone. Some people might have a good location but, that is impossible for others. So, this is one of the major challenges faced by a franchise owner. 

Evaluation process 

Not all interested candidates get a franchise option from a particular company just because of the evaluation done by the franchisors. Before you choose any franchise business, a small evaluation is done by most franchisors. They do this just to make sure that the franchise owner has enough capital and interest or not. If you do not fit any criteria then you are not given the business option.

Interestingly, most franchisors expect franchise owners to only focus on their business and nothing else. This is surely not possible for the ones who are willing to expand their business in other lines. 

Personnel 

Finding the right employees to work at your franchise is a challenge faced by most franchise owners. Some franchisors do not give proper training to the employees hired by that particular franchise. This becomes a heavy business gap for the employees working and the franchise owner of that franchise. We would highly recommend franchise seekers choose the franchise that offers proper training to the staff and managers. 

Less control over the brand 

Yes, when you take up a franchise business franchise owners almost cannot control anything related to the brand. All the business operations, processes, and procedures are set by the parent company which the franchise owners need to follow. This could be demotivating for some franchise owners as they will not feel responsible for anything at the franchise. 

Less decision-making power

When a franchise owner does not have control over the brand that means they cannot decide on any issue. This is again another demotivating factor for franchise owners and one of the greatest challenges faced by almost every franchise owner across the world. It can be frustrating for the owners who will not feel any control or ownership of the franchise that they opened with their money. 

Legal and regulatory compliance 

Franchise owners will need to go through lots of legal and regulatory compliances from the parent company. Most companies change their terms and conditions every year for all their franchises. As a result, the franchise owners will need to upgrade themselves to the latest terms and conditions set by the parent company. The terms and conditions set by the company could either be for the franchise owners or against them. These decisions are generally depended on the luck of the franchise owners. 

Conclusion 

Opening a franchise in today’s fast market might sound like a brilliant idea but, in reality, it's something else. Make sure all the interested candidates do proper ground research on the company you choose before planning to open a franchise. We do not want any to fall into a trap and get nothing after all the investment you have done.