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Mistakes to Avoid When Starting a Franchise Business – Part 2

Mistakes to Avoid When Starting a Franchise Business – Part 2

Franchising is a great option to launch a business, but it has a few extra requirements. In Part 1 of this article, we discussed the five worst errors that brand-new franchise owners could do and why you should steer clear of them. In Part 2, we discuss five frequent mistakes you might make after opening a franchise and the long-term costs associated with them. Â

Not requesting assistance from the franchisor

Depending on the industry, the size of a company, the franchise class, and other factors, franchisors offer different levels of assistance to their franchisees. In addition to being required to do so, the franchisor also chooses to do so since it makes their business function more efficiently overall. In the areas of site selection, initial training, marketing, and other business operations, a franchisee may (and should) ask the franchisor for help.

Even if franchisors charge money for this support, it may still be quite helpful, especially if you’re a novice. Franchisors’ experience and skills might help you decide on better company strategies. A word of advice: read the contract thoroughly and request that the franchisor include any unique assistance-related clauses that you may have in addition to the usual ones.

Considering it to be successful

franchise success

One of the key factors why most business owners choose franchising is that it is a low-risk business proposition. But in all honesty, franchising does not ensure success. How successfully you handle setbacks and address the most frequent issues in your outlet will largely determine whether your business succeeds or fails. Your earnings might crash at any time for a variety of reasons, including the wrong site, poor planning, poor management, etc. So, no matter how busy you are, be sure to prioritise your franchise.

Even if you have several franchises, you must set aside time to concentrate on each one to make sure it is operating efficiently and keeping up with the most recent needs. First and foremost, cultivate a CEO attitude in order to operate a successful franchise. Once you’re in the zone, concentrate on the fundamentals like adhering to the franchise structure, managing every part of the outlet, and building a managerial staff that can assist you in reaching your objectives.

Miscalculating financial flow


Cash flow is the difference between your cash balance at the start of a financial period and your cash balance at the end of it. In essence, this “cash” supports the efficient daily operations of your franchise. If you don’t have enough money to manage a franchise, you might not be able to meet even the most fundamental needs of your company, which might have an impact on how well it runs as a whole.

You must put your attention on the following areas in order to efficiently manage your cash flow:

  • Keeping the records in order is important since neglecting bookkeeping from the start might cause your company to end prematurely.
  • Forecast: Using cash flow projections, you may determine if there is a cash surplus or deficit and how to make the necessary adjustments.
  • Negotiate wherever you can; doing so with suppliers and vendors might help you generate more revenue for your company.
  • Prepare for difficulties by identifying possible issues with cash inflow and resolving them before they arise.
Not adhering to the Franchise Model

Observe the procedure. This is the one motto that is guaranteed to operate a successful franchise business, according to experts. Because it is built on a tried-and-true strategy, franchising is a successful procedure. It operates as a business procedure that has produced exponential outcomes in the past and is anticipated to continue to provide results. Therefore, instead of handling a problem on your own, bring it to the franchisor’s notice if you discover one or have comments.

Fixing something that isn’t broken might result in your franchisee’s mistrust as well as financial losses. Failure to follow the stated plan has further repercussions as well; it impedes growth and has an impact on their company’s general operations. So, if you’re having sales issues, use the sales system; if you’re having marketing issues, use the marketing system; and so on. If you still have a strong want to innovate, it’s best to start from scratch and let your ideal brand develop naturally according to your conditions.

Expecting to be in charge

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You should do business with pragmatism and simplicity. So, before you begin, be sure you have the facts straight. With the intention of becoming their own boss, many aspiring company owners first enter the franchising industry. Sorry to burst your bubble, but it’s rarely even feasible. In other words, even though you could own your store, you do not own the company or the brand. As a result, you are limited in your ability to make major decisions, change the SOP, or alter the environment of the outlet.

Each franchise business is required to carry out instructions. The franchisees must be responsible and answer to the franchisors if anything really bad happens, sales do not rise, or the location is losing money. You should think again if you want to live a life free from professional obligations to answer to anyone and do things your own way. As was previously indicated, you could be better off creating your own company from scratch.

Last Word

If you start out appropriately, franchising may have surprising financial and personal rewards. When you sign the contract, the work doesn’t stop; that’s when it starts. If you’re thinking about buying a franchise business, you should keep the aforementioned advice in mind even after you’ve made the purchase to ensure a smooth start and operation of your firm. Whether a mistake appears serious or simple to you, it might have significant long-term effects, including forfeiting your possessions. Please fill out the Investor Enquiry form if you would want more information about franchise business possibilities in India.


An engineer by qualification, Gaurav started his career in sales and marketing due to his affinity towards networking with people. After learning the tips and tricks of the trade, he made a fresh start as an entrepreneur in the franchising industry back in early 2018, with a vision to bring order and transparency to an unorganized sector. He founded and spearheaded Frankart Global Private Limited, where he consulted, developed, and scaled more than 120 domestic and international brands all over India ranging from different industries such as food & beverage, beauty & wellness, and FMCG retail to name a few. Post-Covid, in mid-2021, he developed FranDocX, India’s first ready-to-use franchise documentation service portal, for the MSME entrepreneurs who were severely affected by the pandemic, and wanted to avail an affordable franchise solution service. His aim is to regularize ethical business practices in the franchising sector so that a greater number of investors can participate and avail the benefits of a structured franchise framework.

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