The Myth That The Franchise Model Is Flawed

Over the years, franchising has earned an unfair reputation. High-profile media stories about franchisors going bust or mistreating franchisees have led to the perception that the entire franchise model is flawed. But is that really the case?

The truth is that franchising isn’t the problem—how some franchisors run their businesses can be. Arguably, franchising is the most successful business expansion model in history. The fact that some franchisors have failed or mismanaged their systems doesn’t mean the model itself is broken. If that logic is applied, we’d have to say independent business models are flawed because a significant number of start-up businesses fail (approx. 95% in the first 5 years), or the employer model is flawed because some businesses don’t comply with employment laws. It just doesn’t add up.

Franchising Works—When It’s Set Up And Approached Properly

The success of a franchise system depends strongly on its structure. The franchisor has full control over the model's setup, the level of support provided, and how well the business adapts to market changes. If these factors aren’t properly thought through, then yes, the risk of franchisee failure increases.

A well-run franchise should offer franchisees a proven business model, ongoing support, and the tools to succeed. If a franchisor fails to deliver these things, the issue isn’t with franchising as a model—it’s with how that particular business was structured.

Franchises Have a Lower Failure Rate Than Independent Businesses

Let’s look at the bigger picture. Independent businesses fail at a much higher rate than franchises. In fact, the vast majority of start-ups don’t survive beyond five years, while franchises have a much higher success rate. Why? Because they operate within a tested system with established branding, marketing, and operational support that independent owners simply don’t have.

So when people say franchising is flawed, they’re often overlooking the fact that franchising significantly reduces the risks of starting a business. The real issue is not the model itself but how individual franchises are run.

The Key to a Strong Franchise: Innovation and Adaptability

Markets change, consumer behaviour evolves, and businesses that don’t adapt get left behind. The same goes for franchises. Some of the most successful franchise brands have stayed at the top by continually evolving—improving their systems, investing in technology, and listening to their franchisees.

Franchise systems that fail are often the ones that refuse to innovate. They either don’t adapt to industry changes, don’t update their business model, or fail to support their franchisees effectively. That’s not a flaw in franchising—it’s a failure of leadership.