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Franchising isn't infallible. Franchises can and do fail – and it's not only the individual franchisees' businesses that can get into trouble. Whist we've written this for franchisees, the reason it's on a franchisor site is so that franchisors can have some idea of common problems, the sort of advice franchisees get and how to prepare for the possibility that it might happen to them. Franchisors themselves can go broke. So if you are considering buying a franchise don't just look at success stories. Look at some of the things that can fail badly and see how they might have been avoided. Otherwise one of the future franchise failures could be you.
You're not making the income you expected.
See what the other franchisees are doing. If everyone's figures are down, it may be a market thing or it may be a misrepresentation from the franchisor, the franchisor's failure to market or advertise... whilst this creates a legal liability in the franchisor the better approach is to collectively try to solve the marketing problem... change the product range? Target a different market segment?
Not getting the marketing support you were promised? Again this is a matter for argument. Try to isolate the problem.
If your training was not up to scratch, you'll know what bits were missing. Then ask the franchisor.
If your territory cannot generate enough trade, you may blame the franchisor, they may blame you. What's important is what's on paper... if they made false claims, such as citing earnings projections based on assumptions rather than giving real-life examples of what franchisees have earned. This is probably in breach of the franchising code. Tackle the problem before it is so bad that you need legal help – you might not be able to afford it by then.
Your franchisor goes broke- It doesn't mean the franchisees go bust too- in many cases a group of franchisees can get together and buy outlets from the receiver, so they are still trading. Often you can keep using the franchisor's name and existing suppliers and customers may well carry on as before.
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