Franchise Failure – How to Stop

Franchise failure is something that we’ve all heard about recently.

As many of you will know, franchising is somewhat of a political football at the moment. With submissions closing last week into the Joint Parliamentary Committee on Corporations and Financial Service’s inquiry into the operation and effectiveness of the Franchising Code of Conduct, the spotlight is firmly on our industry.

For anyone who would like to read the submissions, they are publicly available via the Parliament of Australia website and make for interesting reading. The enquiry has raised a number of valuable questions about the FCOC and about how the industry approaches it.

The FCOC provides a framework – a set of standards but the best franchise networks will always seek to put the franchisee first, and sometimes this will go ‘above and beyond’ the FCOC based on the unique needs of their network and business.

For a quick internal enquiry into your own practices to ensure that your network is not setting up for franchise failure and to provide the best experience for franchisees, a couple of questions to consider include:


  1. Are we evaluating the value of franchise services in what we are delivering or what the franchisee is seeing value in and reskinning relevant services which make a difference to the franchisee’s business?
  2. Is our franchisor infrastructure up-to-date? Are we lean and efficient, using technology to increase our optimisation?
  3. Do we know our financial franchisee model? Do we have the data available to assist all new franchisees in making the best decision which suits their wealth aspirations?
  4. Are we being empathetic to our franchisees? When did we last check in with our support team to ensure we welcome new franchisees with integrity and ensure we maintain this approach throughout the exit process?

Franchisor Profitability

  1. Is the franchisor’s financial viability reliant (or not) franchise sales?
  2. Are we trustworthy in managing the funds of the franchisee collective via the Marketing Fund? Have we disrupted the marketing fund purpose to deliver brand growth to the brand and to the franchisees in their local purpose?
  3. Are we gaining value in supplier rebates? Is “buying” group to ensuring we use our size and power to continually have the best deals available in the marketplace to keep our cost of doing business in check?
  4. Do our financial benchmarks validate the health of our franchise group?

Franchisee Culture

  1. Are we being responsive to our franchisee? Remember, they are our internal customers – are we treating their feedback and needs in the same way we would an external customer?
  2. Is the culture of the franchise community of our brand build on being franchisee-centric? Is this represented in everything we deliver, speak and launch?
  3. Are we nurturing franchisee citizenship? Are we encouraging ongoing, honest, two-way dialogue that has shared and agreed accountability and responsibility? Are these the core values of how we do business?
  4. How and when do we speak with franchisees? Is the information snackable, relevant and accessible on demand?
  5. Is the relationship between the franchisor and the franchisee in every situation operating at a win/win level?

Field Coaches

  1. Is the Performance Coach a trusted and valued coach of the franchisee empowering the franchisee to greatness within their business and frontline of their services to the end consumer?
  1. When did we last “refresh” the FCOC with our Support Team?

Author: Corina Vucic
I thrive in an active environment and climb bridges for the thrill of it but my real passion is supporting businesses to meet their potential and flourish. Whether your goal is to franchise your business, take your franchise to the next level or simply move your business in another direction, I can lead, support and motivate you, step-by-step.