A healthy franchise model has the luxury of choice in relation to the ‘chicken and the egg’ question raised by Jason. Questionable franchise models tend to, but not always, be limited to finding a franchisee and then finding a site. That depends on their franchise promotional budget rather than the franchisee product/service advertising fund.
The first question is whether sites are selected because they ‘fit’ and can perform or because they are ‘available’. The second is whether the franchisee was selected because he/she was available and funded or whether he/she ‘fits’ the selection criteria for a particular franchise/industry.
Good models are capable of mistakes, but they are rare.
Horror franchising is based in the naivety of prospective franchisees and a failure to perform SERIOUS due diligence of the franchise model, the business concept, the location fit and importantly, the franchising expertise of their ‘qualified advisors’.
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Both parties to a franchise contract need to ensure they have undertaken serious due diligence on the site. And everything else.