What mistakes are made when companies franchise their business?
|I think there's two mistakes; the first mistake is that the franchisor does not vet the franchisee properly. The prospective franchisee may not have any business management experience, may not have any business experience in that particular field. They are just going to be passive investors and they've got some idea that all's they do is come in Saturday morning and clean out the cash register. It just does not work. The second mistake that franchisors make is a failure to follow up on the quality control of the product that the franchisee is putting out, be it clothing, be it food, whatever it is. The franchisee may start to cut corners and put out an inferior product. That ruins the reputation of the entire chain of franchises.|