1851

1. Insufficient capital. 

Before a franchisor begins to sign new franchisees, it&rsquo;s extremely important that the brand&rsquo;s capital is in a strong position. &ldquo;Without the proper capital, it will be impossible to grow the brand and market it to the right markets, potential investors and franchisees,&rdquo; said Sean Fitzgerald,&nbsp;<a href="http://www.nolimitagency.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=5-reasons-emerging-franchises-fail-how-to-avoid-them-2705893" target="_blank" rel="nofollow" target="_blank">No Limit Agency*</a>&nbsp;Chief Development Officer. Furthermore, it&rsquo;s very expensive to become a franchise and buy into those rights.

2. Inexperience. 

Any emerging franchise brand needs a strong team made up of individuals who&rsquo;ve had franchise experience. Having strong leadership who&rsquo;s had experience with franchise development will set up your system for great success.

3. Not selecting the right franchisees for your system. &nbsp;

Many emerging brands are reliant on accepting anyone as a franchisee because they need to bring in capital and open new locations. As a franchisor, it&rsquo;s important to make sure you&rsquo;re not choosing franchisees that don&rsquo;t meet your values. &ldquo;If you choose an individual who should not be in your system, there&rsquo;s a very good chance they will under-produce at their location and be unhappy within the system,&rdquo; says Fitzgerald. It&rsquo;s important to choose franchisees that want to buy into your brand&rsquo;s system and are going to be successful. In order to ensure you are choosing the right franchisee, it&rsquo;s important that the individual has a strong understanding of marketing, sales and knows how to execute on a local level.&nbsp;&nbsp; They also need to be well capitalized for the investment.

4. Brand viability. 

It&rsquo;s crucial that a brand is viable and will be easily replicable in all markets. If a brand doesn&rsquo;t have a strong system in place, it will be hard to replicate the same concept in other markets, making it hard to achieve success across the board. Make sure the business opportunity is unique and has strong brand awareness, which will help with marketing and encourage loyalty.

5. Control. 

It&rsquo;s important to make sure each of your franchisees are buying into your system and business model. Early franchisees that commit will sometimes not follow the process, and the franchisor won&rsquo;t hold them accountable.&nbsp; The franchisor can become insecure and worried they may lose the business. &nbsp;This lack of accountability and structure can lead to franchisees opening up locations in areas that aren&rsquo;t a fit or following incorrect business practices. It&rsquo;s important from the on-set that the franchisor and franchisee develop a relationship built on respect; one that follows the given business model. &ldquo;Once you have one or two franchisees who aren&rsquo;t following the business model, you can lose complete control and consistency which jeopardizes the brand&rsquo;s entire franchise system,&rdquo; concluded Fitzgerald.&nbsp;

5 Reasons Emerging Franchises Fail & How to Avoid Them

1851 Franchise

Emerging franchises may face many challenges in their early stages. Here are the five top reasons why emerging franchises fail and how these mistakes can be easily avoided.    

5-reasons-emerging-franchises-fail-how-to-avoid-them

Layne's Chicken Fingers

image of Masroor Fatany, a prolific laynes chicken franchisee

Why This Texas A&M Alum Invested in Layne’s, Committing to 10-Plus Restaurants in the Houston Area

why-texas-a&m-alum-bought-laynes-franchise

Right at Home

Right at Home Expanding In-Home Care Services in Janesville, Wisconsin

right-at-home-expanding-in-home-care-services-in-janesville-wisconsin

petbar

petbar Franchise - Q3 2025 - Press Release - 1851 Franchise

petbar Celebrates 10 Years of Growth With Record Q3 Performance and New Franchise Signings

petbar-10-year-anniversary-q3-growth-franchise

DoodyCalls

How Jason Heimberg Rescripts Success as a DoodyCalls Franchise Owner

From Law School to Screenplays to Scoops: How Jason Heimberg Rescripts Success as a DoodyCalls Franchise Owner

doodycalls-franchisee-jason-heimberg-frederick

DoodyCalls Franchise - Julie Dickens - Franchisee Feature - 1851 Franchise

From NICU Nurse to Mompreneur: How Julie Dickens Found Her Calling with DoodyCalls

julie-dickens-doodycalls-franchise-dallas-fort-worth

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Amazon outage, AWS outage, Amazon AWS logo

The Day the Cloud Stalled: How Amazon's Outage Impacted Franchise Economy

amazon-aws-outage-franchise-impact-travel-dining-failure

Thursday 1851 Franchise Agg - NASAA’s Noncompete Push

NASAA’s Noncompete Push Puts Franchise Growth on Uncertain Ground

franchise-noncompete-nasaa-advisory-reasonableness-standard

How a Steady Economy Could Help Franchisors Plan Their Next Move

how-a-steady-economy-could-help-franchisors-plan-their-next-move

Bed Bath & Beyond - Franchise Expansion - Retail Strategy - 1851 Franchise

Bed Bath & Beyond Launches Franchise Model as Part of Comeback Strategy

bed-bath-beyond-franchise-expansion-retail-strategy

Senior Entrepreneurship - Franchising - 1851 Franchise

Senior Entrepreneurship Is Rising — And Franchising Is a Key Outlet

senior-entrepreneurship-franchising-silver-startups

NJCAR v. Ford - New Jersey Supreme Court Limits Standing Under Franchise Practices Act

New Jersey Supreme Court Limits Standing Under Franchise Practices Act

new-jersey-franchise-practices-act-njcar-v-ford

Power Eats: Smoothie King Rolls Out Food Nationwide To Fuel Franchise Growth

smoothie-king-food-menu-power-eats

McDonald’s Is the Latest Franchise To Bet Big on Beverages with 500-Store Premium Drink Test

mcdonalds-is-the-latest-franchise-to-bet-big-on-beverages-with-500-store-premium-drink-test

Health Care Hiring Slowdown Highlights In-Home Care Franchise Opportunities - 1851 Franchise Agg

Health Care Hiring Slowdown Highlights In-Home Care Franchise Opportunities 

health-care-hiring-slowdown-in-home-care-franchise-opportunities

A Practical Playbook: Who To Call First When Franchising Your Business

franchising-your-business-who-to-call-first

image of jerome hanway from right at home Las Cruces, New Mexico 1851 franchise franchisee spotlight

Jerome Hanway Is Building His Right at Home Franchise Around His Mission To Serve

right-at-home-franchise-las-cruces-jerome-hanway

image of franchise deep dive from 1851 franchise on doody calls franchise authority brands

DoodyCalls Franchise Costs, Fees, Profit and Data for 2025

doodycalls-franchise-deep-dive

graphic image of an 1851 franchisee spotlight brayden and johnny steven of teriyaki madness

Father-and-Daughter Team Bring Teriyaki Madness to Wichita, Kansas, With Big Expansion Plans

johnny-brayden-steven-teriyaki-madness-wichita

1851 Franchisee Spotlight graphic with photo of Barb Volk and KidStrong logo

5 Reasons Emerging Franchises Fail & How to Avoid Them

MORE STORIES LIKE THIS