Different studies (conducted primarily in the U.S.) show that
about only 25% of new franchisors are still active 15 years after
starting up their franchise.
After examining causes leading to the demise of franchise
systems that did not pass the 15-year mark, the following eight
factors (or mortal sins) were found to be the most common:
Underfunding or Underinvestment
Starting-up a franchise network requires a fairly significant
amount of funding, which many new franchisors greatly
underestimate.
Most new franchisors will ask how much it will cost to launch a
franchising program, but forget to ask the second, and more
important, question of how much time and how many franchisees will
be needed for the franchise revenues to exceed the costs and
investments required to launch and maintain a solid franchise
organization.
