Franchisors spend 80% of their time and resources worrying about the bottom 20% of performers in their system.
- Weak operators usually pay the least in royalties.
- Poor franchisee operating results adversely impact the operating metrics of the entire system.
- Under-performing franchisees leave customers doubting the brand’s products, services, and value.
- Struggling franchisees embolden competitors to go after more markets and attack the livelihoods of other franchisees.
- Average franchisees can be pulled down as they observe peers struggle or fail.
- Struggling franchisees make it more difficult for franchisors to recruit new franchisees.
- Failed franchise locations can sour landlords on the brand, limiting access to the best real estate.
- In the worst case, failed franchisees can lead to litigation.