In my 20 years as a Franchise Consultant, I’ve seen some really smart people walk away from some really good opportunities! I’m going to share with you, from my experience, the Top 10 Reasons People Walk Away From a Franchise Opportunity.
#1: They Can’t Afford It.
The number one reason I see people walk away from a franchise opportunity is because they determined they cannot afford it. Maybe they didn’t qualify for the loan they thought they were going to get, or more than likely during their due diligence, when they were validating with other franchise owners, they saw how long it was going to take to positively cash flow, and that did not meet their expectations.
#2: It’s Too Much Work.
Many people have the false belief that a franchise is plug and play because it’s a proven business with a proven plan. They have an expectation that during their due diligence is proved to be wrong.
#3: A Lack of Leadership.
Sometimes it’s the case that the franchisor’s process didn’t inspire confidence. If you are investing in a franchise, which is a proven business plan, strong franchise owners have a process to take a candidate through. And that process will inspire confidence in the process that the candidate is then buying in the franchise. Sometimes that process is lacking and that can lead to the candidate feeling less than inspired about the opportunity.
#4: The Territory Doesn’t Work.
Often, I see candidates questioning the viability of their territory or the open territory that they would be moving their business into. My response: It is not in a franchisor’s best interest to award a territory that does not work! Most of the time, when a candidate is questioning the viability of a territory, it’s really not true, and the validation process should help a candidate answer that question. When you can go out and you can interview existing franchise owners who have a great understanding of what makes a viable territory, then they can share in their experience what makes a great viable territory!
#5: They Are Too Entrepreneurial.
There are some candidates that I work with that after going through the entire process, really figure out they’re not suited to franchise ownership. They love inventing, they love creating, they’re not really interested in following that proven process. They start to question all the fees. They start to question all the systems. And in questioning all of these things, (which really are the value proposition of buying into a franchise!), they come to the conclusion that they’re not really suited to be a franchise owner.
#6: An Unsupportive Spouse.
Sometimes it’s hard for two people to come together and agree that this opportunity is the right opportunity for their future goals. Some people are more conservative and some people are more adventurous. The value of an experienced Franchise Consultant is in identifying these different risk tolerances up front and therefore being able to coach the couple together. The more conservative spouse may need more time, may need more information, may need more nights to sleep on this decision than the more adventurous spouse. But in the end, a good Franchise Consultant can probably help that couple get to the same place so they can say “yes” to the business.
#7: Unsupportive Advisors, Family, or Friends.
When it’s your dream to own a business, my advice to you is this: Don’t go telling the entire world what you want to do! When the dream is in your heart and you’re the one stepping out on the bleeding edge, if you’re nervous about it, how much more nervous will the people be who love you and want to protect you? I’ve seen so many dreams stolen by well-intentioned advisors, family and friends simply because they haven’t gone through the process that you’ve gone through, in order to feel confident that this is the right business. If the dream is in you, keep it to yourself until you get to a point where you can adequately defend the opportunity so that somebody outside of the process doesn’t steal that dream from you.
#8: Turned Down by the Franchisor.
Franchises are awarded, not sold. So it’s a mutual evaluation process where you get to learn about the opportunity and the franchisor gets to learn about you. But ultimately, it’s the franchise owner’s opportunity to award to you before it’s your business to buy. Why do they say no? Sometimes franchisors will feel like maybe this is not the right cultural fit for you. Sometimes they may feel like you’re just slightly undercapitalized and they don’t want to put you in a position that’s going to jeopardize your financial future. I’d say the number one reason that franchise owners say no to people is simply because they just don’t feel that the candidate is coachable. If a candidate comes to a Discovery Day event guns blazing, asking tough questions, challenging the franchisor at every step of the process, the franchisor is thinking to themselves, if this person is like this before we take their money, what the heck happens after we take their money? So sometimes the franchisor feels it’s in everyone’s best interest to just say no.
#9: They Can’t Get Financing.
Not everybody qualifies for financing. And if you’re out trying to shop alone on your own at your local bank, that can be a black hole! There are specialized lending groups who all they do is help fund franchise businesses. A good Franchise Consultant will have resources like this available to help, you know, early on in your process, if you will, qualify for franchise lending.
#10: Fear.
Fear is definitely the greatest dream killer. iIn my 20 years of Franchise Consultant history, I don’t think I’ve worked with one candidate who hasn’t exhibited some amount of anxiety or fear at some point in the process. But really, that’s the value of a good Franchise Consultant: Helping to identify where fear or assumptions or false expectations can be turned into questions, and then brought back into a positive due diligence experience. In the end, it’s up to a candidate to really manage their own anxiety and fear… But managing fear is where a great Franchise Consultant can truly earn their value!
Are you ready to begin your own franchise exploratory process with an experienced Franchise Consultant so that you don’t fall into some of these Top 10 reasons why people won’t move forward? If you are, please email me now!