Avoiding The 4 Most Common Franchising Errors

Opening any business can be risky, but franchising can mitigate some of those risks with training, established systems, and support from established franchises. Still, mistakes can happen, and some can have dire repercussions for both franchisees and franchisors alike.

If your franchise is failing to meet sales targets, it may be worth exploring why and learning more about successful franchising. Here are five mistakes you should avoid while franchising your business.

Failing To Do Your Due Diligence

Franchises can be an effective way to expand and diversify your business while earning income, yet they are not the ideal choice for all businesses. Many franchises make development mistakes that lead them down the path toward failure if they’re planning on franchising. It is vital that prospective franchisers understand these potential pitfalls so they can avoid them in advance.

One of the biggest mistakes to be made when buying a franchise is failing to do your due diligence. This involves researching and verifying financial and legal information provided by franchisors as well as consulting reputable franchise experts.

Failing to do your due diligence can lead to various problems, from litigation to damage to brand image and franchisees. Consultations with franchise experts throughout the franchise process is vital in order to avoid costly errors and ensure a seamless expansion process. It may also be wise to plan your growth strategically by first expanding in local and regional territories before expanding nationally.

Failing To Follow The System

One of the most frequently made mistakes when franchising is failing to follow a proven system devised by their franchisor. Over time, this system has been refined through hard work and experimentation and can reduce franchise failure risk considerably.


Lack of training or the desire for independence can cause franchisees to deviate from established systems, which can have significant repercussions for their business – from damaging customer relations to diminishing brand consistency.

Franchise systems should endeavor to gain an understanding of why their franchisees are failing by reviewing inspection reports, action plans, letters, emails, and telephone logs of failed franchisees’ locations. Once this information has been gathered, it can be used to enhance the system and reduce franchisee failure rates in the future; for instance, if it were discovered that their financial system wasn’t robust enough to track cash flow, then training can be provided as necessary to address this issue.

Underestimating The Competition

Though franchise ownership can be less risky than starting from scratch, it still presents unique challenges and can result in mistakes which lead to its collapse. First-time franchisors in particular often make errors which lead to their businesses failing.

Small errors may seem inconsequential at first, but when added together, they can quickly spiral out of control and create an irreparable problem for your franchise business. Therefore, it is crucial that you recognize which mistakes could potentially threaten its survival and take corrective measures as soon as possible.


One of the most frequent franchise mistakes is underestimating competition, often when an expanding company grows too rapidly for it to manage the challenges that come with expansion. To avoid this misstep, take your time when making any decisions and evaluate the market before making decisions; always listen and be open to feedback and advice from other franchisees.

Failing To Maintain The Brand Image

As franchise lawyers, we often hear the classic quote that saying mistakes can only be seen as opportunities to learn is true; however, repeating costly errors over and over can be very detrimental to a franchisor’s business.

Implementing clear brand protection guidelines, style guides, and processes in order to keep franchisees aligned is absolutely necessary for brand preservation and to reduce costly disputes between franchisees and the brand. Failing to do so could result in miscommunication between franchisees and brand protection services, as well as potential litigation expenses for brand protection breaches.

Failing to obtain professional legal and sales advice early on can have devastating repercussions for any franchisor. Due to the complex laws and regulations surrounding franchise ownership, it’s essential that experienced professionals are consulted early.

Greg Baskerville
Greg Baskerville
Gaming Blogger & Musician. Playing games since the Amiga days in the 1980's, and a handy guitarist.

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