Why some companies of concession fail

The concept of franchising is in a healthy idea of the companies. Many became rich because of him. However, not all the companies of concession become an example of success. There are several factors which can contribute to the problem.

A few units of concession, although parented by large companies, to make the mark due to the lack of the distributor to respect rigorously with the program and of the concession. After the system of the company and the provisions of the agreement of the concession is crucial with the success of any unit of concession because it is the gasoline of franchising.

Some companies dare in franchising with little experiment and the limited resources, consequently they cannot develop an effective system of concession. Although they can be sweet-talk able of the prospects by buying a concession, some, if not all, these concessions are condemned to fail because of the defective system of the company.

In certain cases, the company did not place much attention and of effort at the detail of the research of the market at the concession because its main concern sells as many concessions like possible, without studying what to be the ideal number of units in a given success of sector if ensure.

The market is affected per many external factors which are beyond the order of the companies. Those include the condition of the nation 'saving in S, the demonstration of the war or local social agitation, market demand or variation in the preferences, the manifestation of the disease which affects the raw materials provisioning, of the natural disasters, or something which would cause the reduction sudden and significant goods of provisioning or the market demand, or both. Unfortunately, the companies cannot make much about these conditions. The key with survival adapts to the current conditions and can take the blow, until the conditions are better. Sad to say, not many companies can make both that they succumb thus then to the pressure.

Other concessions ceased operations after a certain hour because they did not obtain a firm agreement of central management to put in provision proportioned, essential part, and continuous support with the concession.

Some did not obtain the interlocking of their own employees to support a new sales strategy or to develop the new employee and the qualifications of management to help them to face the market requires.

The lack to handle and order the change is also another factor in the collapse of a concession. The distributor cannot have sufficient perspicacity about the personnel of the of the 'resistance of S to the change (new strategy, model of management or policies) to being able to detect it immediately and handle the situation correctly.

Moreover, the distributor can miss the knowledge required in technology, operational systems and organization which it loses credibility among its employees. In such a situation, the moral one of the personnel will be low and an high rate of turnover of the employees can be considered. This dissatisfaction will certainly reflect on their quality of initiative and work, and will be reflected in all the level with output with the unit.

The concessions also can blow missed of with report/ratio and of the control systems those proportioned in particular which were given up by the head office after the companies opened. All the companies which do not have a strict report/ratio and the control system will most probably function on vague evaluations, until it closes finally the shop.

There are many reasons behind the failure of a concession but all those can be avoided with a complete study of the company, of its existing network of concession, adapted formation, and strict conformity in extreme cases of the agreement of the concession.