This article is a repost from March 15, 2009
It is unfortunate the franchise industry continues to be (and always will be) subjected to bad press because of franchisee failures resulting in lost family savings including the children’s college fund. It’s unfortunate because bad press sells and society has evolved into accident watchers. Need I say “rubber necking on the highway?”
Not to mention that society has become full of gossipers. When was the last time you heard someone in the neighborhood say “Did you know Joe and Mary have been married for thirty happy years?” Such a positive comment is usually left unspoken, at best. Instead, you would be more likely to hear, “Did you know that Joe cheated on Mary.” Well, I think you see the point.
Would it be better for the press to report franchisee failure due to the franchisee not following the system, being undercapitalized or because of serious substance abuse problems? I seriously doubt it. But wouldn’t that at least educate the public? The same public that is looking at franchising as a career alternative or their first step into entrepreneurship. I know, that’s never going to happen either but it would shed a light on the truth.
I haven’t even touched upon less than reputable franchisors, undercapitalized franchise concepts and poor lending practices. Regardless, of how much government tries to protect potential franchise candidates, the government and the industry itself cannot effectively police every franchise professional, every franchise company and every aspect of commercial lending. It’s just not feasible and possible.
What’s the Solution?
So, the ultimate answer lies in dedicating more time and resources in positively publicizing franchise concepts and the industry itself. As well, promoting efforts and results in working with community and non-profit groups would go a long way towards positive public sentiment.
Basically, we (reputable franchisors, franchise professionals and the industry as a whole), need to create a publicity bank that can be withdrawn from as a precaution and hedge against the potential and reality of negative publicity. And just like the cash reserves insurance companies are required to have on hand for future claims, multiple sources and instances of positive publicity must be accumulated to counter the few negative counts of publicity that the media so enthusiastically reports.
The world would not be a better place without franchising. We just need to inform and remind people of the industry’s efforts and accomplishments so the world knows how franchising has actually made the world a better place and will continue to do so for years to come.
The challenge is that in today’s uncertain economic environment, where franchisors continue to cut budgets, the possibility of dedicating more resources towards positive publicity is slim to none. Certainly, it won’t be done in the traditional sense.
But it can be achieved, as it can also be achieved for marketing, development and operations, by exploring non-traditional strategies, methods and processes which are essential to future franchise growth and success.. at all levels.
Acceler8Success Cafe 
A publicity Bank is a good idea, but perhaps more useful and less subjective would be a Franchising Statistical Data Bank where failure and success rates of each franchise can be accessed, by anyone who is interested.
Actually most of the data can be found on the net now, but it is fragmented and all over the place. It might put an end to the “95% franchise success rate” myth and help people make smarter decisons on which franchise to buy
Paul,
I take your posting as a sincere expression of your experience in franchising.
However, I assure you that WikidFranchise.org stories are real and transcend a few well-lobbed cliches.
All the best,
Les Stewart MBA
FranchiseFool
WikidFranchise.org
Midhurst ON Canada
Many people go into business starry-eyed. We need more education up-front on many of the relevant biz issues. One of the most issues s financing the business properly . Unrealestic expectation abounds on all sides
Absolutely! I agree much has to be done to prevent franchise failure. And like publicity, a concerted effort with ample dedication of resources must be made from day one.
Thanks for sharing your thoughts and insight. It is most appreciated, as always!
I have to agree with Thomas. More professional standands in franchisee recruitment is the most effective and significant strategy for preventing franchisee failure. This combined with more of a focus on sustainable franchisee profitability would help to clean up the industry’s PR problem. This is enlightened franchising. While good publicity is of course important this is a band aid to deeper systemic problems.
It is unfortunate that the public perception of franchising is often poor. In reality, starting any business carries risk – a franchise has lots of advantages over a startup business but has the same inherent risk. I’ve been both a franchisee and a franchisor and I see the same trends in almost every franchise company I’ve sees: some people are naturally performers, some do just average and some just plain don’t do the work. Any and every business requires drive, hustle and some sales skills. Without these even a franchisee in a franchise system with the best track record, systems and support will not succeed. At Showhomes and with anyone I work with, I really urge personality profiling. Tools like the DISC profile and Caliper’s sales assessment can help a prospective franchise owner much better size up their strengths and weaknesses. I spend a lot of time talking people out of buying our franchise – as a franchisor, I’m really interested in building high performance teams and recruiting franchisees is not much different than hiring staff: recruit a winner and they build successful businesses. Recruit some one you hope to train to become a winner and you’ll invest tons of time and money getting them up to speed with no guarantee they will succeed. Recruit someone who is not really a fit (reguardless of how much money they have) and they will fail 100% of the time.