Do franchisees become successful?
Introduction
The number of franchises that fail is a lot lower than starting a business from scratch. The rate of failure for small business owners who go it alone can be as high as 90 percent, while the failure rate for franchised businesses ranges from 10 percent to 60 percent—and those figures don't count all the other companies that fold after a few years because they didn't manage growth well. The fact is, if you want to be successful in small business ownership, you need a plan and some solid management skills.
Do franchisees become successful?
The answer to this question is yes. Franchise owners can be successful and make a lot of money, but it's not guaranteed.
Success depends on a number of factors: the franchise you choose, the franchisor and their support system, your own goals and drive, as well as luck (or maybe even Divine intervention).
The number of franchises that fail due to poor management is huge.
You're not alone in your concern. We all want to know if franchisees will be successful, but it's important to remember that many franchisees fail as well. According to a study by the International Franchise Association (IFA), only 28% of franchised businesses survive past their fifth year.
The reasons for this high failure rate are varied and complex, but one of them is poor management on both sides: Franchisors can also fail if they don't have enough knowledge about how to run their business or do not manage their franchisees properly; similarly, if you're considering buying into a franchise system or opening up your own location within an existing chain, then you need to make sure that both parties are ready for what comes next-and failure isn't one of those things!
How do you avoid the failure rate of other franchisees?
Franchisees have a high failure rate. It's not a secret, but it's also not something you hear about often. When you're considering investing in a franchise opportunity, you need to know what that failure rate looks like so that you can avoid it.
If the franchise industry were an average job market, we'd expect around 50% of new businesses to fail within their first year and 90% by year five. However, according to FranchiseHelp's research on franchising:
- 75% of all franchises last at least 10 years and 45% are still in business after 20 years or more;
- Only 1% of franchisors close down within five years (vs 22% for non-franchises);
- So how do these statistics compare with those found elsewhere?
- If you are going the franchise route, make sure you know what you're getting into.
- If you're going the franchise route, make sure you know what you're getting into.
- Make sure that your time, money and skills are available.
- Make sure that your location is suitable for a business of this type.
- Make sure that the product or service being offered by the franchisee can be successful in the area where it will be sold (or serviced).
Conclusion
In conclusion, the answer to this question is yes. As long as you're willing to put in the work and learn from your mistakes, there's no reason why you can't become successful as a franchisee.
