Below are a list of some of top or main reasons why individual franchise locations eventually fail or go out of business:
Poor Location: As with real estate, its all about location for retail franchise businesses. A sub prime location with low visibility and marginal traffic is often a tough (and often impossible) obstacle to over come when starting and establishing a new franchise.
Incompetent Owners: 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 initial sacrifices required to succeed.
Overwhelming Competition: Many franchise concepts face enormous competitive forces from similar businesses and trying to survive in an already over saturated retail market.
Under Capitalized: Many new franchise owners don’t make it because they simply run out of working capital or don’t have adequate funds to survive the crucial start-up phase and reach profitability.