Many executive business management teams with to propel their product or service through the marketplace and their brand name through franchising. This makes sense for many reasons, although we must also consider that franchising is a highly over regulated industry. To top it off, it is not easy selling franchises. Why is that you ask?

Well in franchising it is harder than hell to get someone to buy the first franchise, once you sell the first one it is much easier to show people that unit instead of a company owned unit and then they are much more interested. In my franchising company, which I founded, I gave away my first franchise and sold the second one on terms, I financed them and the third one for half price and made deals for the next 10 to get the darn thing going. Really that is the reality of Franchising Start-ups, although no one seems to talk about it.

Anyone who has ever founded a franchise knows this. And to that point most under financed franchisees fail anyway and a franchisor in the long-run, does not help himself or the franchisee in doing this, but unless you have millions to start then that is the way most franchisors do things. I would say that is why only 1 in 5 franchisors makes it for 5-years? You think franchisee failure rates are high or even small business for that matter? Try entering the letigious world of being a Franchisor?

It is for these reasons that I would advise executive business management teams considering franchising as a way to distribute their product quickly through the marketplace to be forewarned that you will need at least $1-$2,000,000 to get your franchising strategy and business model up and running. Please consider this in 2006.