"Churn" is the turnover rate for terminated franchisees - and the article indicates that: "The bottom 10 percent of bad franchisors have more than triple the churn of franchised stores from franchisor terminations of stores and ceased operations by franchisees than the top 10 percent, according to a 5 year research of Franchise Disclosure Documents by FranchiseGrade.com." This is a significant difference and one that all potential franchise buyers should take into account when deciding on a franchise system.
As a franchise attorney, I see many questionable franchise offering and implore clients to conduct thorough due diligence! There are too many ways to lose your money out there ... and while many systems ride the wave of "franchising is great," not all of them are successful and some do quite poorly.
Protect yourself - get a Franchise Disclosure Document, work with knowledgeable counsel, read some books about buying a franchise (like mine), and check out grading services like The Franchise Grade® Top 500 list - these are all low cost ways to conduct due diligence. Do not make up your mind until you have ALL the information.
Quality is important.
Post a Comment