It doesn’t happen all that often, but when it does it can be catastrophic.
You see, if the franchise model is wrong then the franchise just cannot succeed.
You’d think so wouldn’t you? But it’s not always the case and if it’s not the case, getting the potential franchisor to that it’s wrong is not easy, either.
But I’m starting the story in the middle and I need to give you more details to explain what I mean.
I was contacted last week by a guy who wants to set up a franchise operation. All well and good so far, but when we got to talking about the model it was obvious to blind Freddy that he’d got it wrong… in his own favour. You see the model was set up in such a way that the franchisee could do a deal and make no money on it even though the franchisor would be guaranteed to get their cut.
In other words the franchisee might lose out on unfair deals.
Trying to explain why this might be a bad thing was very difficult… and it was difficult for 2 reasons. Firstly, the guy couldn’t understand why this was a bad thing and the fact that his franchisees would soon cotton onto the imbalance and tell everyone else about the issue. But secondly, and most importantly, he hadn’t made the leap from running his business and being a franchisor.
Until he does, his model will always be wrong and it just won’t work.