Below are a list of some of main reasons why some individual franchise businesses or owners don’t succeed or eventually go out of business.
Bad Location: As with real estate, its all about location for retail franchise businesses. A marginal location with low visibility and low traffic is often a tough (and often impossible) obstacle to over come when starting a new franchise business.
Incompetent Ownership: Many franchise businesses never stand a chance of surviving because the owner (or franchisee) is just not capable of following the franchise system or making the necessary and crucial sacrifices required to succeed as a franchise business owner.
Fierce Competition: Many new franchise locations face enormous competitive pressures from similar businesses and franchises already established in their target market.
Under Capitalized: Many new franchise businesses and owners don’t make it because they simply run out of working capital or just don’t have the liquid funds to survive until they are profitable.