MENU
Franchise - Find franchise Opportunities in the UK, Point Franchise
0
Empty
basket
  • Home
  • Account
  • Franchises by Region, County or City
    • Franchise opportunities by Region
    • Franchise opportunities by County
    • Franchise opportunities by Town / City
  • Franchises by Sectors
    • Business & B2B Services
    • Car & Automotive
    • Cleaning
    • Estate Agency & Property
    • Finance
    • Food
    • Franchise Services
    • Gym, Sport & Beauty
    • Home Based
    • Home Improvement & Construction
    • IT, High-Tech & Online
    • Master Franchise
    • Personal & Home Care Services
    • Pet
    • Restaurant, Coffee Shop & Pub
    • Retail & Stores
    • Travel & Leisure
    • Van Based
    • All sectors and industries
  • Franchises by Investment
    • Low-cost franchises
    • Franchises under £10K
    • Franchises under £20K
    • Franchises under £30K
    • Franchises under £40K
    • Franchises under £50K
    • Franchises under £100K
    • Franchises under £150K
    • Franchises under £200K
    • Franchises over £200K
  • Franchise Directory
  • Franchise Opportunities
    • Best Franchises
    • Most Profitable Franchises
    • New Franchises
  • Franchise News & Articles
    • Franchise News
    • Franchise Articles
    • Dictionary
    • Interviews
  • Franchise Experts
    • Latest articles from our experts
    • Our experts
  • Franchisor Area
    • Get your franchise listed for free
    • Advertise
  • Articles
  • Franchisor Tips
  • Franchise Your Business
  • How to Overcome the Most Common Franchising Hurdles

How to Overcome the Most Common Franchising Hurdles

Share:
Modified on 25/01/2021 10:59:33 - Published on 14/01/2018 08:00:00

Franchising hurdles

The franchise model provides a way to expand your business efficiently, with individual investors spending their money to develop additional branches under your branding. But, as in any system, those involved may come up against obstacles from time to time. Here, we’re exploring the most common franchising hurdles and how you can overcome them. 


When you experience complications in business, it can feel like the end of the world - but most franchising obstacles can be conquered with a little foresight and ingenuity. Across the UK, there are more than 44,000 franchised businesses flourishing, which shows just how effective the model can be. 

Let’s dive straight into the most common franchising hurdles. 

1. Lack of capital

Creating a franchise system is expensive. In fact, a lack of funds is the biggest problem for new franchisors. 

From developing legal contracts and franchisee training programmes to marketing materials and ongoing networking opportunities, there’s a lot to organise at the start of the process. And although newcomers pay a start-up fee, it rarely covers the full cost of their training and support. 

According to Kim Ellis, a senior consultant with MSA Worldwide, a typical franchise needs at least 20 profitable units to become royalty-sufficient. Reaching this point could take a couple of years, and it’s possible your funds will dry up before you get there. 

The solution: Develop a realistic break-even analysis before starting your new enterprise. It’s easier said than done, but an experienced franchise consultant could be of help. You’d also be wise to research the best franchises currently in operation and find out their starting cost; this will help you develop your own plan. Then, you can approach banks and other official lenders - ideally ones with a specialist franchise department.

 

2. Weak infrastructure

A business isn’t necessarily destined for franchise greatness just because it’s managed to turn a profit as a single unit. Brands often have to completely transform in order to see success across an entire region, country or continent. 

If you try to expand with a weak infrastructure, you’ll probably fail to attract quality franchisees and end up getting edged out of the market by larger competitors. In the long term, your business is likely to fail. 

The solution: Research is key here, but another great way to build a robust infrastructure is to invest in an expert team. You should focus on developing departments to oversee aspects such as operations, finance, training and marketing. A strong infrastructure allows franchises to operate like a well-oiled machine, so it’s important you have people around you who can support your transition into franchising. 

3. Unprofitable territories

It’s fairly common for a brand to be incredibly popular in one location and fail to find a large customer base in another. Product demand, consumer buying habits and trends vary from place to place, so there are no guarantees your business will turn a profit in the regions you’ve earmarked for expansion. 

Approve an investment contract for an unsuitable territory, and you could end up with significant debts, a frustrated franchisee and a tarnished reputation. 

The solution: Unfortunately, you can never know for sure whether your business will succeed in a specific territory, but you can put yourself in the best possible position by conducting market research. Look at how similar businesses have performed in your target area and whether there’s a gap in the market for your offering. The more data you can find, the more likely you are to make the right decision. 


>> Read more:

  • Top 8 Tips for Being a Happy Franchisee
  • Mythbusters: There Is No Innovation in Franchising
  • How to Stay Productive as a Franchisee
  • Top 8 Tips for Securing Finance for Your Franchise
  • 10 Ways to Boost Employee Happiness, Engagement, and Satisfaction
  • 7 Tips for Building a Profitable Franchise

4. Unsuitable franchisees

Sometimes, franchisors are eager to grow their business quickly and award franchise agreements to unsuitable candidates. Whether they take investments from friends and family, or just inexperienced or non-committal applicants, rushing into partnerships is a dangerous move.

Usually, franchisors in this situation end up parting ways with the franchisee further down the line and spending unnecessary capital on training and onboarding a new investor. In the best case scenario, the unsuitable franchisee leaves before doing any real damage to the franchise as a whole. 

The solution: However much you want to get your business off the ground - and however long it takes you to find the right investors - it’s worth taking your time. Your franchise deserves the best, so you should be selective in only partnering with the highest quality candidates. Taking this approach will allow you to gather a team of driven and loyal investors, who work with the brand’s best interests at heart. 


>> Read more:

  • 5 Tips for Developing Your Employees into Future Franchisees
  • Being a Successful Franchisee Means Adopting an Entrepreneur Mindset
  • 7 Common Habits of Successful Franchisees
  • Mythbusters: Common Misconceptions About What Makes a Successful Franchisee
  • Five Tips for Boosting Your Self-Confidence as a Business Owner
  • Traits of an entrepreneur

5. Poor timing

Developing a franchise takes time - time to raise money, build the infrastructure, carry out market research and recruit the franchisees, to name just some of the tasks involved. The problem is, once you’ve ironed out all the kinks in your plan, the market will likely have changed and you’ll need to adapt your strategy. 

Many franchisors spend too much time designing the perfect franchise business model and never take the final step to put it into action. Others jump in too soon and are caught out by unexpected pitfalls. 

The solution: It’s crucial you find the balance between acting too quickly and holding out for too long. Aim to catch a gap in the market without overlooking any critical aspects of operating a profitable franchise. If you wait for the perfect time, you could be waiting forever, so, ultimately, it comes down to you to judge the situation. 

More resources

Point Franchise is dedicated to giving ambitious entrepreneurs the data and insight they need to establish and develop successful businesses. Every day, we publish informative articles on a wide variety of franchising topics. 

For more tips for overcoming franchise challenges, see our daily business guides or use the search box to find specific publications. 

You can also catch up on the latest news in the franchising world to see how businesses are using the franchise model to expand every day.

Alice Tuffery, Point Franchise ©

Mindspan franchise Mindspan
Min. investment £1,895 +VAT
Business & B2B Services
Request
information
Sweet Spot franchise Sweet Spot
Min. investment £20,000
Restaurant, Coffee Shop & Pub
Request
information
Town & Country Cleaning franchise Town & Country Cleaning
Min. investment £15,000
Cleaning
Request
information
Party Tent Company franchise Party Tent Company
Min. investment £15,000
Travel & Leisure
Request
information
Cafe2U franchise Cafe2U
Min. investment £15,000
Van Based
Request
information
These articles may interest you

Four Tough Business Decisions That Every Franchisor Will Eventually Have to Make

Making difficult decisions about the health and direction of your [...]

Article published on 23/06/2021 08:00

Is Your New Business Idea Really Worth Pursuing?

Starting a new business can be a difficult process. When you’re [...]

Article published on 05/06/2021 08:00

Franchisor Tips: How to Develop the Right Franchise Infrastructure

A good infrastructure is imperative to building a successful franchise. [...]

Article published on 01/06/2021 08:38

Celebrating the best of the best in British franchising

The Elite Franchise Top 100 (EF100) is thrilled to announce the latest [...]

Article published on 05/12/2023 17:26
FRANCHISING EVENTS

The Future is Halal: Emerging Franchise Opportunities in the UK Halal Market

Embracing a Growing Market  In a world that’s becoming [...]

Article published on 21/07/2023 09:23
TOP FRANCHISES

8 Steps for Opening a Car Repair Garage

Transport is part of our daily lives. We drive to work, take the [...]

Article published on 28/06/2023 16:27
STARTING A FRANCHISE
Did you enjoy this article? Please rate this article
Be the first to rate this article
Newsletter Envelope

Did you enjoy this article?
Subscribe to our newsletter!

Receive up-to-date industry news, in-depth articles and the newest franchise opportunities directly to your inbox.

0 Comments

Still no comment for this article. Be the first to publish a comment!

Post a comment

Characters remaining: 250

Top 4 recruiting sectors
  • Dessert Franchises
  • Garage & Car Repair Franchises
  • Kids & Childrens Franchises
  • Security Franchises
Top 5 franchise opportunities
  • Franchise Local Shops Local Shops Franchise
  • Franchise NLP4Kids NLP4Kids Franchise
  • Franchise People Building People Building Franchise
  • Franchise Tubz Vending Tubz Vending Franchise
  • Franchise Your Local Takeaways Your Local Takeaways Franchise
Top 5 recruiting cities
  • 1 Birmingham
  • 2 Bristol
  • 3 Glasgow
  • 4 Leeds
  • 5 Manchester
Franchises by
minimum investment
Low-cost franchises Franchises under £10K Franchises under £20K Franchises under £30K Franchises under £40K Franchises under £50K Franchises under £100K Franchises under £150K Franchises under £200K Franchises over £200K
Latest News
  • Aspray - George Cusack Renews Aspray Franchise, Reinforcing the...
  • TaxAssist Accountants - Price setting has never been easier for TaxAssist network
  • TaxAssist Accountants - Franchise resale success for TaxAssist Accountants in 2023
  • TaxAssist Accountants - TaxAssist Accountants Crawley welcomes new owner
  • Right at Home - New franchise owners make ambitious plans for Right at...
Newsletter Envelope

Did you enjoy this article?
Subscribe to our newsletter!

Receive up-to-date industry news, in-depth articles and the newest franchise opportunities directly to your inbox.

Find your franchise
  • UK Franchise Directory
  • Best Franchises
  • New Franchises
  • Most Profitable Franchises
  • Dictionary
  • Interviews
  • Checklist
Our top guides
  • Franchise for Sale
  • Franchise Definition
  • Starting a Franchise
  • What is a Franchisee?
  • What is a Franchisor?
  • Franchise Agreement
  • Franchise Shows and Exhibitions
Are you a franchisor?
  • Advertise your franchise with us
Subscribe to our newsletter
Useful links
  • About us
  • Privacy policy
  • Sitemap
  • Contact us
  • Consent notices
  • Terms and conditions
  • Disclaimer
  • Our writers
Follow us
Infopro Digital
✕
point franchises newsletter

Keep up to date with the franchise industry