The Small Business Administration reported that roughly 5 percent of new
franchises fail each year. After analysis of the failures, here’s what they
identified as the primary causes:

1. The idea. Sometimes the concept is too confusing or comes along at the
wrong time. Not a lot you can do after the fact to change that.

2. Bad location. Even with a well branded name, if you are off the beaten
path or in an isolated area, the opportunity to be as lucrative as possible
diminishes.

3. Poor/marketing advertising. Even though most franchisors have national
advertising funds that you contribute to, local marketing is ultimately
your responsibility and that’s where the rubber meets the road.

4. Competition. There are over 180,000 franchisees in the U.S. and that
means a lot of competition.

5. Unrealistic expectations. Many franchised locations require two to
three years to turn a profit.

By the way, effective Local Store Marketing can reverse the trend of all
five of those causes.