Why Franchisors Fail: Lessons From The Titanic

April 10, 2012 by Mark | 0 Comments


The collapse of Angus & Robertson, Kleenmaid and several other insolvencies of both small and large franchisors in recent years have thrown the issue of franchisor failure into a rarely illuminated spotlight.

Franchisor failure, like death, is an uncomfortable topic that people rarely discuss publicly.

Like a sinking ship, a franchisor failure often creates a suction that drags surviving franchisees down with it, leaving only a small amount of wreckage on the surface to identify that the system ever existed (such as a vacant store, a painted-over sign, or a Google search that references an outdated website). But this flotsam associated with the tragedy of a system collapse is rarely visible years or even months after the event.

One hundred years ago, the Titanic, an “unsinkable” passenger liner that became the greatest maritime disaster of all time, sank with its lights on and engines running. Franchisors can also sink in a similar fashion. A month after its parent company was placed into administration last year, book retail chain Angus & Robertson was still touting its virtues as a business opportunity on its website. Continue reading.

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