Inhibitors to Franchise Success - Six Major Considerations

Posted by Janon Otto on Thu, Mar 10, 2016 @ 13:03 PM

whyfranchisefailDespite franchising being a safer way of doing business, it doesn't mean that it's risk free! Because of this, it's important when researching franchises to carefully look at your options, and find out which franchise systems could cause you major problems over the long run - and which franchise systems will provide you with a great formula for franchise success! Below are some of the top problem areas in why a franchise might struggle.

1.  Lack of Systems: Franchising is all about systems. Being able to replicate a successful franchise system is what makes a business franchiseable. An ethical franchise has everything documented and systemized so that it can easily be passed on to others for successful implementation. If a business doesn't have any systems and instead relies only on the skills of individuals within the business, then it shouldn't be franchised. However, some businesses will ignore this and try to franchise their business anyway. Unfortunately, these companies usually are only interested in a quick buck, and aren't overly concerned in who may or may not have the required skills for the successful operation of the franchise.

2. No Track Record: A business can only be franchised if it has a track record. We're often amazed at the amount of people who have an idea for a franchise, but then don't actually have a business! Remember: the business comes first - it's not conceived at the same time as the franchise! Those usually wanting to start a franchise without having a business are again looking to make money fast. Make sure that the franchisor has an established track record of running a business, along with a great reputation of success in franchising!

3.  Location: Half the battle of owning a successful franchise is finding the right location for your business. And depending on the nature of your business, not all franchisees need to be in a city center location or shopping mall. However, a good franchisor will help you study local demographics and work with you to find a great location.

4.  Lack of Marketing: Good franchisors will spend money on promoting the brand nationally as well as in the local area. Ask the franchisor about their marketing activities, and what they plan on doing to help gain recognition and awareness for your franchise. In today's environment there are many ways a franchisor can help market your business in your local area, if they don't plan to help you with that it is another red flag.  A franchise system should have data on local marketing efforts of other franchises in the system, access to that information saves you lots of time and money!

5.  Competition: Check out the competition for your franchise in the local market. If there isn't any competition, there might not be a demand for the product - which may result in it not having much future market potential. On the other hand - you may have discovered the perfect franchise for your area!  There may be a real need for this business, and being first to market can be a great advantage for you.  Additionally, if there's too much competition, introducing a new franchise might be a struggle as well. Be sure to look into markets similar to your own where the franchise is operating in order to judge how well it might do in your local area.  A good franchisor should have access to information that can help you decide whether the competition factor in your area is a plus or a minus.

6.  Insufficient Funds: One of the biggest reasons franchises can fail is that the franchisee has under-estimated how much money is needed to buy and run the franchise. It's not just about having money for the investment, but about the costs you'll incur when running the business. For example, how will you plan on paying staff salaries or having enough for supplies? If your franchise business is not making money initially, you'll need to make sure you have anough money for day-to-day operating costs, as well as paying your own bills. Over-estimating what you need is a good way to calculate the cost of running a franchise.

Are you interested in learning how YOU can join the Shear Madness Haircuts for Kids family and run your own successful small business? We are one of the fastest growing kids hair salon franchise systems in the industry today! If you would like to learn more about small business marketing, great marketing strategies, resources for small businesses, how to grow a small business, or how to become a successful owner of your own kids hair salon franchise business, please click below or call 1-888-98 GONE MAD!

Item 7 Download

Topics: salon franchise, buying a franchise, franchise opportunity, Small Business Franchise Information, business growth, franchising, franchisee support, franchise research

2015: a Great Year of Growth!

Posted by Matthew S on Wed, Jan 13, 2016 @ 12:01 PM

Toddopening1.jpg2015 was another year of GREAT franchise growth for Shear Madness Franchising! We began our expansion into the Northeast United States by signing a multi-unit development agreement in the late spring and now have a location open in New York State. This agreement will allow us to expand our award winning Shear Madness Haircuts for Kids concept into our sixth, seventh and eighth state and give us continued momentum going forward into 2016. Some of the reasons Todd Danni (our New York franchise owner) selected Shear Madness Haircuts for Kids was because of our franchise experience, our commitment to multi-unit development, a healthy and balanced relationship with the franchisor, and the ability to "test" market a location. 

AnkenyOpening.jpgMeanwhile, our existing franchise locations continued to see double digit growth in sales and revenue, and our franchisee in Des Monies opened her second location in Iowa. Shear Madness Haircuts for Kids Franchise Owner Erin Nanke notes that, “Before joining Shear Madness Haircuts For Kids as a franchisee, I spent 9 months researching the children's haircutting industry and my community to ensure there was a need and it was an underserved market.  I researched over 3 dozen different children's salons from the biggest franchises to the smallest independently owned across the country.  I made a list of pros and cons about each salon, what I liked and didn't as a potential business owner and as a consumer and mom of three children. Shear Madness Haircuts For Kids by far exceeds every other children's salon in its:  culture, aesthetic appeal, business model and franchisor support."  

conferencecollage.jpgAt our Movement to the Madness Summer Conference in July of 2015 we introduced a new Revenue Stream and a new tagline, because at Shear Madness we want to be known as the place "Where Every Child Matters". Janon Otto, CEO of Shear Madness Franchising LLC had the following to say in regards ot our awesome franchisees: "Each day I come to the office, I am inspired by your efforts! Your belief in what we are doing and your willingness to accept the day to day challenges of business inspire me on a daily basis. We could not have asked for a better group of franchisees to grow with, and I am sincerely grateful to each and every one of you!"

It should also be noted that over the past year, we've been diligent in expanding our large blog library of business tips and franchise resources, which can be found here. We've written about topics like Effective Franchise Support, Growing Your Small Business, the Five Stages of Business (Get a Head Start with Franchising), and Is a Kids Hair Salon a Good Investment?

So as we look forward to the future, we also hope that you will take the time to consider how our opportunity may fit into your expansion plans! Interested in learning more about how you can become an owner of your own exciting Shear Madness location? As one of the best kids salon franchise systems out there, we're also one of the fastest growing kids hair salons in the industry today! And we're always working hard to share our many great resources, small business marketing strategies and business tips so that our franchisees will have the tools to succeed! If you're interested in learning how to become a successful owner of your own childrens salon franchise business, please click below or call 1-888-98 GONE MAD!

Item 7 Download

Topics: buying a franchise, franchise opportunity, franchisee support, franchise research, franchise growth