“We should have cut our losses and pulled out, but we were assured over and
over again that the next thing they were doing was going to fix all the problems
and that success was just around the corner if we only worked hard and were
Patrick, Former Franchisee
… we were at training and were advised that the Life Vision system was
going to be a large television and not the system touted as revolutionary was
such a huge red flag. And, during the same time period when we were advised
that [a key executive] was no longer with the company, that this was another
huge red flag. Carol
The UnhappyFranchisee.com website features interviews with failed
and struggling franchise owners who regret not performing more thorough due
diligence and more carefully scrutinizing the franchise system they joined.
These franchisees are gracious enough to share the expensive lessons they
learned with prospective franchise owners, and offer their advice on how to
avoid the pitfalls that no one warned them about.
One of the common pieces of advice: Don’t ignore the red
Many of those who regret their decisions admitted that they had seen warning
signs early in the process, or during training, but gave the franchisor the
benefit of the doubt and went with the flow. Many regret not having pulled the
plug when their gut instinct told them things were not as they had appeared. It
may have cost them legal fees and their initial deposits, but no where near the
cost that they eventually paid.
What are some of the red flags? Carol
King realized during training that many of the systems had
been exaggerated and oversold. The revolutionary, multimedia experience she
thought she’d be offering customers turned out to be a flat screen monitor and
pre-recorded DVDs. Company executives that had influenced her decision were
leaving the company, and had never been involved to the degree stated.
Patrick saw red flags that there were serious problems with the design,
permitting and construction process and disputes between the franchisor and
vendors. It took her 22 months to get her franchise opened, during which time
most of her working capital and advertising budget was depleted.
Tip #4 from unhappy franchisees:
If you see red flags, don’t keep driving. In the words of Robyn
Rivera, “you can’t afford to be trusting when you are risking your
retirement or your children’s future.”
Sean Kelly is a 20 year veteran of the franchise industry, and founder of the
award-winning marketing firm IdeaFarm. In 2006, he founded the FranBest franchise networkbest franchise opportunities, the top new franchises, franchise marketing, franchise public relations and small business marketing. Contact
him at seankelly[at]ideafarm.net.