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Top 10 Underperforming Franchise Segments
by Ed Teixeira
See the top 10 franchise sectors with those franchisors that had trouble
growing. I call them underperforming franchisors.
A few weeks ago I published an article entitled
A Startling Franchise Industry Statistic . It reported on franchisors that
had sold less than five new franchises despite having been a franchisor for
several years. As a follow up to this article I took a look at which franchise
industry segments had the highest percent of what I’ll refer to as the
“Underperforming Franchisors”.
Following is a list of the top ten Underperformers led by the franchise
segment with the highest percent:
- Educational Products and Services
- Pet Centers
- Health ,Nutrition and Services/Fitness
- Construction and Remodeling
- Children’s Products and Educational Services
- Ice Cream, Yogurt, Smoothies
- Business Aida and Services
- Beauty Salons and Tanning
- Senior Care
- Restaurant, Drive In and Carryout
As you review this ranking keep in mind that the reasons some franchise
segments have a higher percentage of Underperformers compared to others can be
due to a number of factors:
- The franchise segment is growing rapidly and as a result
attracts more start-ups.
- Some franchises are by their nature more difficult to sell.
- Certain start-ups lack the business and/or financial
resources to grow.
- Hot franchise concepts tend to draw new franchisors into
that sector some of which are not up to the challenge.
- A number of start-up franchisors simply stop actively
selling franchises but remain in business as a company operation
while retaining the franchise label.
These are the main reasons why there are a higher number of Underperformers in
some franchise segments versus others. The lesson for those businesses
considering a franchise program is to have the right business model coupled with
sufficient capital and good franchising advice. Finally, don’t allow yourself to
be convinced that any business can be franchised.
© 2011 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He
can be reached at franchiseknowhow@gmail.com
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