A Good Franchisor Makes The Difference – Top 7 Franchisee Challenges

In the world today, starting your own business can be a risky venture and, for some people, will end in failure. In fact, according to the U.S. Bureau of Labor Statistics, about 20% of small businesses fail within the first year and 50% fail within the first five years.

Franchises have a reputation of staying in business for longer than traditional small businesses because of things like.

  • Smaller startup fees
  • Training from franchisors
  • Established business plans
  • Strategies for overcoming obstacles

That being said, owning and running a franchise is still a lot of work and requires just as much attention, dedication, and passion.

With over 55 different franchise locations spread across the US and Canada, Five Star Bath Solutions has seen its fair share of great franchisees and those who didn’t last very long. 

This article draws on the experiences of past and present franchise owners with this company to help create a guide for you as you are thinking about franchising.

Questions to ask yourself before starting your own business or franchise

Before getting signed up and started with a franchise, there are certain things you should do to plan ahead to decide if this is the right move for you.

Start by asking yourself the following questions:

  1. Why do I want to start this business?
  2. Do I have enough money to keep this business running?
  3. Am I passionate about this industry?

These questions will help you decide and understand the direction that you will want to take with your franchise and help you plan for the future.

For more important questions that can help you make a better decision when you are getting started, see the following article: 
The 6 Critical Questions you Need To Ask Yourself Before Buying That Franchise 

Common Challenges Franchisees Are Facing

Before getting started on the different reasons why franchises can fail, it’s important to understand how franchisees and franchisors work together.

What is a Franchisor?

A franchisor can either be a person or a company. They are the ones who sell the rights or licenses to others to run a company, a franchise, using the company name. The franchisor collects a monthly royalty from the franchisee for being able to run their business under the company name.

What is a Franchisee?

A franchisee is the person who buys the rights to run this company using the corporate company name. For Example, Five Star Bath Solutions is a franchisor that grants permission to franchisees to run businesses like Five Star Bath Solutions of Salt Lake City or Five Star Bath Solutions of Austin.

Why Do Franchisees Fail?

There are a lot of different things that can happen or unforeseen circumstances that can arise that attribute to a franchise’s success and failure. Some are out of the franchisee’s control, but mostly likely, when a franchise fails, it’s because of something the franchisee did or didn’t do.

Here are the top seven struggles that franchisees face when it comes to running their businesses.

Lack of Business Skills

Business Skills

While most franchisors don’t require their franchisees to have past experience in the industry, as a franchisee, you should understand the basics of running a business or what it will take to be successful. The top reason franchises fail is because the franchise owner doesn’t have the understanding of what running a business entails.

Usually what happens is people hear that franchisees are easier to take care of and so they don’t comprehend the type of commitment that they are looking at. 

If you are wanting to be successful as a franchise owner, understand that you will have to put in as much, if not more time and attention into your business. 

Underestimating the Commitment

In the world today, the phrase, “Be Your Own Boss,” and “Set Your Own Hours” have come to be the target and desire of most aspiring business people. So, when they hear that you can own a franchise where you will receive help and training and see less obstacles, a light bulb goes off in their heads that says, “Problem Solved!”

What they don’t understand is that, even though it is a franchise, you are still expected to put in your full time and effort, which often means working after hours, weekends, and holidays. It’s imperative that you prepare for everything to come.

Poor Planning

When running a business, there is no such thing as over preparing. When tends to happen is franchise owners will plan for what is needed to get started and then leave the rest to the franchisor. This can lead to things like understaffing, insufficient funds, and poor lead generation.

In order to be successful with any business, you have to plan for what it will take to get started, what is needed to get the business running, and overcoming any and all obstacles that may arise.

Insufficient Working Capital

This point cannot be stressed enough. This is something that should be thought of well before opening your franchise, but is often one of the most overlooked aspects of business.

Before getting started, you need to understand that you will need capital to buy the franchise, to open your business, to run your business, and to pay any and all employees that you may have. And that is put simply. 

Be sure to always have a savings account that you can fall back onto if you run into trouble or to use when you run into unforeseen problems.

Inability to adapt

When COVID-19 hit, many businesses were faced with a challenge. They either adapt and find a way to make their businesses work, or continue what they are doing which most likely will lead to closing their doors for good.

For example, Five Star Bath Solutions adapted and overcame problems that arose because of COVID by offering virtual consultations instead of in-home consultations and adapting their service and advertising to a way that helped customers maintain their safety and comfort while in quarantine.

While you may be waiting for instruction from your franchisor, it is most likely going to be up to you to decide how to adapt and overcome.

Lack of Trust In Franchisor

Signing on as a franchise owner means you are signing on as an owner of a much bigger company. That being said, you will most likely not have a big say in what goes into your marketing, your product selection, or the service that you will be offering. For many people, that is what stops them from being able to trust their franchisor.

Before you get upset at the lack of influence you have in the whole franchise company, understand that the franchisor has years of experience in this industry and has found all of the right answers to help you make money and be successful. If you don’t make money, then the franchisor doesn’t make money. Your objectives are aligned, so trust that they are doing what is best for your business.

Unrealistic Expectations

Lastly, one of the top reasons why franchises fail is because they are unable to set realistic goals and expectations for their business. Your expectations should match the level of effort that you are willing to put in.

Don’t plan on making millions of dollars if you don’t want to put in the effort to create a successful business or to plan ahead for obstacles and problems that may arise.


Don’t fall into the trap of thinking that you can be successful without preparing for all problems that may arise and putting in the work necessary to grow your business.

To recap, these are the top seven challenges that franchisees will face in creating successful business.

  1. Lack of Business Skills
  2. Underestimating The Commitment
  3. Poor Planning
  4. Insufficient Working Capital
  5. Inability To Adapt
  6. Lack of Trust In The Franchisor
  7. Unrealistic Expectations

Let us know what you thought of this article and if it was helpful.

For more great articles that can help you as you work to create a successful franchise, visit www.bathsolutionsfranchising.com/blog.