Some entrepreneurs dream their whole lives about owning a successful and thriving franchise system. As the field becomes increasingly competitive, it becomes more and more difficult to build a unique and profitable brand.

Franchise problems and solutions are changing by the day. While it’s helpful to be a bold, fearless risk-taker when running a franchise business, it doesn’t guarantee success for your franchise. New franchise ideas are always right around the corner and owners need to be prepared to overcome hurdles as they arise.

Here are some basic issues in franchising and how you can overcome them.

#1: Lack of Capital

Like other new businesses, franchisees need a sufficient amount of capital to get started on the right foot. Getting enough capital is particularly challenging in the first year due to the sheer cost of creating the system and supporting new franchisees.

If you’re a new franchisor, don’t underestimate how much money you’ll need to build the franchise to the point of being self-sufficient. You should also have plenty of capital to pay for the building infrastructure as well as to support incoming franchisees. New franchisees will need assistance with operations, accounting, marketing, and other administrative work to get the franchise off the ground.

Experts note that it will typically take at least 20 profitable franchise units before one franchise is supported. This is a common issue with franchising that many people don’t understand before going into it.

Solution to the Problem

In the early stage of the franchise, you’ll need to outsource professionals who know how to navigate this process. Hiring consultants, lawyers, brand development experts, and other essential workers who are committed to your success. Consider taking out a franchising business loan to make ends meet during this time.

#2: Building a Strong Infrastructure

Another challenge of franchising is building a sound infrastructure. The backbone of any successful franchise is ironed-out systems, procedures, and protocols that provide a growth roadmap for future franchise locations. New franchisors may have a difficult time building out a solid infrastructure that will support the future growth of their business.

It’s particularly dangerous to grow and expand before you have figured out what works for the first franchise. Without proving what works and what doesn’t, it will be impossible to learn how to measure success in future franchises. Plus, if you’re unable to make a profit in a singular location, you can’t expect future locations to be profitable.

Solution to the Problem

To combat this, new franchise owners should conduct a thorough analysis of the systems and procedures in place. Figure out what is working and what isn’t to gain the additional support necessary. Conducting a gap analysis of what is needed can provide clearer direction for the first franchise and set future franchise locations up for success.

#3: Choosing the Right Franchisees

How successful any given franchise depends upon the franchisee's quality, and the franchise sector is becoming increasingly competitive by the day. Choose the right people who will support your vision during both stressful and flourishing times. The process of becoming a franchisee requires interested entrepreneurs to endure many different processes and prove their commitment to the franchise.

Financial stress is typically common ground when a franchise is starting and franchisors may be tempted to jump at the first murmurs of financial instability. Attracting and retaining the right people to support your business will be key as you expand into new locations. Having a sound team on your side is an integral part of success.

Solution to the Problem

Building relationships with your franchisors is a huge help in the long-term success of your franchise sector. Networking and building genuine bonds with existing franchisees is one of the biggest assets you can build for yourself as a franchise owner. You’ll be able to strategize, talk about what’s working and what isn’t, and lean on them as you recruit new franchisees.

#4: Hiring the Right Team

Another common franchise problem is finding the right team to hire. The team with which you surround yourself is one of the most important aspects of starting and running a franchise sector. If you are an emerging franchisor, know that franchisees will interact with nearly every person at your company in some way. They need to be a positive representation of your brand and your relationship with them should be built on trust.

Always hire people that have the same core values as you and can bring a unique skill set to the table. They should reflect your brand and believe in the long-term growth of the business.

Solution to the Problem

Your employees are your greatest asset! Identifying your company’s strengths and weaknesses gives you insight into the types of people you should hire to help bridge any gaps in your workforce. As your company grows, you’ll need to interact with employees across different departments and you want to be sure you’re all working toward the same goal.

#5: Adapting to Being a New Franchisor

The transition from being an employee into a franchisor is one of the most difficult aspects of running a franchise business. Entrepreneurs are used to overseeing the daily operations of businesses, but franchising a business requires a completely different skill set.

Any good franchising entrepreneur needs to have grit and tenacity in addition to great leadership skills. They need the ability to motivate and inspire their employees, and they also know when they should take risks versus holding back. Great franchise leaders will set the tone with positive energy and work to build a hardworking, supportive team around them.

Solution to the Problem

Franchisors need to understand that running a business is much different than running a franchise business. Instead of focusing on all aspects of the business, franchisors should know when and how to spend their energy for the most effective business approach. Keep the brand moving forward by focusing on recruitment, support, and strategic development.

#6: Enforcing the Brand Vision

Franchise control problems are common. With the success of the first franchise comes an expansion into different geographical locations. This expansion could be on a local, regional, national, or even international level which poses a branding challenge. No matter the number of franchise locations, the brand vision needs to be consistent throughout. Brand standards ensure that your franchise isn’t seen as a single entity but rather as part of a bigger, consistent brand.

The first few franchise businesses are typically close together in location, making it that much easier for the franchisor to be directly involved in performance and branding. As more locations emerge, it’s essential to have strategies in place on how to scale while focusing on quality control. Remember that all locations are a direct reflection of your brand and should maintain the same quality.

Solution to the Problem

Having sound strategies in place to ensure each franchise location is reflective of the brand can help your business scale. Having established recruitment and infrastructure in place can help eliminate inconsistencies and keep new franchisees fully engaged in their tasks. The more your growing team feels like they are involved in the brand mission, the more loyal they will feel to producing a quality franchise location.

#7: Poor Support Structure

New franchisees will require a good amount of support to plan and scale the proper infrastructure. This is a common mistake that many new franchisors don’t take the time to iron out. As a result, as soon as the business begins to grow and new franchisees join, the franchisor is unable to cope properly.

These issues can impact simple aspects of your business such as your website being fully equipped to handle the influx of traffic or more serious issues such as not having the right systems in place to ensure quality control. One issue can have a domino effect on the rest of the franchise and directly disrupt the brand’s reputation.

Solution to the Problem

Franchisors should always make sure that they can scale their business at a larger volume. This is important to establish when working on the initial franchise model and building out the first franchise’s structure and processes. As the business scales, the strong foundation will transfer to new franchises.

This is where software like serviceminder.io can help streamline your business’ operations on a singular platform.

Conclusion

Starting a franchise takes a lot of hard work and it’s critical to have the right strategy to scale the brand successfully. With so many challenges with franchise control problems right off the bat, it’s always recommended to use business management software to assist you in building a strong foundation as you scale your business.

Serviceminder.io is designed to help with a range of obstacles; from local franchisees to global campaigns, our software will quickly become an integral part of your operations. We encourage you to book a demo with us to see how it can help your business!