Several potential mistakes can be committed when it comes to business franchising. The 15 biggest franchising mistakes in India that business owners make while growing their businesses will be covered in this article.
Thus, it is important to do your homework before choosing to franchise your business in India. Therefore, Your chances of success can rise by avoiding these mistakes!
Biggest franchising mistakes soon-to-be franchisers make in India
It’s possible to grow your business in India and widen your market by franchising, but you should avoid mistakes while franchising if you want to get the most out of this approach.
To discover how to start a franchise in India with the least amount of mistakes, it’s critical to have a clear business plan in place and to know what you’re doing before you start.
Table Of Content- 15 Biggest franchising mistakes
- Lack of business plan
- Increasing too rapidly
- Lack of Capital Funds
- No proper line-up of franchising costs
- Inadequate staff training
- Business SOPs not in place
- Acquiring additional profits from franchisee owners
- Lapse of in-house franchise owners
- Inappropriate evaluation of competitors
- Franchisee Profiling
- Advertisement and Marketing costing
- Underestimating the value of your franchise system
- Hasty preparation of documentation
- Audit & Other Mandatory Checks
Lack Of Business Plan (#1 Biggest franchising mistakes)
Not having a business plan is the first biggest franchising mistake business owners frequently make when franchising their business. if you’re considering franchising, make sure to invest the necessary time in developing a business plan that will position you for success.
Main points to be included in a Business Plan:
- Target audience as well as tapped markets
- Advertisement & Marketing Strategies
- Finance Forecasting
Increasing Too Rapidly (#2 Biggest franchising mistake)
Expansion too rapidly is another common error business owners make while franchising their business. You should watch out for indications that your company is growing too soon.
Lack of Capital Funding (#3 Biggest franchising mistakes)
To franchise your business and avoid one of the biggest franchising mistakes, here are some associated costs which will be required:
- License Fees
- Inventory & Software Procurement
- Insurance for business
- Marketing involvements
- Training setups for the team
The best course of action is to postpone franchising your company until you have enough cash on hand to cover these costs.
No Proper Line-up of Franchising Costs (#4 Biggest franchising mistakes)
To avoid unpleasant surprises later on, it’s crucial to budget carefully and precisely estimate the cost of franchising when you’re thinking about expanding your business.
Inadequate staff training (#5 Biggest franchising mistakes)
Lack of adequate training and assistance for new franchise owners and staff is another mistake business owners make when franchising their business. Furthermore, without adequate staff training, your business may suffer from dissatisfied clients or individuals who are ill-equipped to handle the obligations that come with running a business.
Staff training includes:
- Making available comprehensive business policies and procedures
- creating manuals or videos with specialised training content
- providing new hires with continual mentoring and assistance
- establishing regular performance evaluations to make sure that corporate objectives are being met
Business SOPs Not in place (#6 Biggest franchising mistakes)
Nevertheless, to make sure that your business will continue to run effectively in the event of unanticipated situations, it is crucial to establish thorough and well-written Standard Operating Procedures (SOPs) for every aspect of your business.
SOPs which include:
- Employer and employee development
- customer service guidelines
- procedures for product development
- operational procedures for businesses
Acquiring additional profits from franchisee owners (#7 Biggest franchising mistakes)
Taking an excessive amount of the franchisees’ earnings could harm your company as well as make it more difficult for your team to be successful.
Key aspects that would drain the franchise owners are:
- Imposing disproportionate royalties and fees
- Making required improvements or modifications that the franchisees do not need or want
- Limiting marketing or advertising initiatives
- Implementing unjust or rigid norms and regulations
- Requesting excessive control over daily activities
- Failing to offer sufficient assistance and training
Lapse of in-house franchise owners (#8 Biggest franchising mistakes)
The company employs in-house franchise owners, who are also authorised to launch new franchises. This not only helps the business expand more quickly, but it also helps to guarantee quality control.
Having in-house franchise owners enhances your chances of starting a new franchise by selecting the right candidates who are familiar with the business policies and processes.
Location (#9 Biggest franchising mistakes)
Selecting the wrong location while business expansion can lead to failure in attracting customers as the foot traffic would be quite low. Also, it is high on the business costs. These are issues which will affect the business growth and in turn, profitability.
Inappropriate evaluation of competitors (#10 Biggest franchising mistakes)
This is a crucial aspect for any kind of business to grow. Key pointers which could influence your growth as a business owner are:
- Not able to identify whom all are the actual competitors or just by choosing one
- Not conducting a proper keyword search or google ranking
- Not keeping updated with the latest industry trends
- Not keeping updated with the latest blogs or news of competitors
- Just checking once in a while
Franchisee Profiling (#11)
The use of profiling can be beneficial. To determine whether an applicant would be a suitable fit for their franchise system, many franchisors use profiling. By doing this, the franchisor can save time and money if the connection isn’t meant to work out, as well as help future applicants.
Advertisement and Marketing costing (#12)
Though you may decide to cut corners on advertising and marketing your brand, it is necessary to pay attention to the quality of work that you would be advertising. Low-quality work along with low costs could prove wrong for your business.
Underestimating the value of the franchise system (#13)
One of the most well-known advantages of being a business owner and also a franchiser is knowing the value of being a franchiser. So don’t underestimate this system when franchising.
Hasty Preparation Of Documentation (#14)
As a franchiser, once we see we have a potential candidate, there are chances that we grab the opportunity of going ahead and preparing the franchise agreement. Well, this hasty decision is not a fruitful one. This could lead to bad decision-making for your business’s growth.
Audit & Other Mandatory Checks (#15)
The ongoing reinforcement of brand standards as well as best practices through audits engage owners and franchisees. An audit is not a non-active endeavour. Rather, it actively involves the franchisee or store owner in making constant improvements to the business in line with industry standards. In short, This is a point which is frequently neglected by franchisers due to various reasons.
The Bottom Line- Biggest Franchising Mistakes
Sparkleminds has successfully assisted 100 business franchises over the past 20 years. The tried-and-true Sparkleminds consultant module has made sure that the franchisors don’t make expensive franchising mistakes, losing a lot of time as well as important resources in the process.
So, no matter where you are in the franchising process, you may use our assistance to create a solid foundation without making common mistakes.