Some concept sellers simply believe that their idea is hot and that they need to move quickly. Few franchisee prospects, particularly the smart ones, will sign up for something simply because you promise them it will work. That's another obvious hurdle, but one that is often barreled through by eager franchisers, convinced that adding more units is the way to overcome a rocky start. Indeed, building more units to simply build more market presence is hardly a way to generate profits for your whole system. In fact, it's often less than zero.
Experts suggest waiting for at least three consecutive years of profits before starting a franchise.
N.J. Despite early success, he held off franchising his Huntington Learning Centers Inc., for kindergarten through high-school students, even as a competitor, Sylvan Learning Systems Inc., of Baltimore, began franchising a similar concept. Before launching his own franchise operation, Dr. Huntington built 17 more learning centers himself, perfecting his procedures and training. He sold his first franchise in 1985, expanded quickly, and now has 155 franchised learning centers in addition to the 47 centers owned by the Oradell-based corporation. So, be sure the profit margin is there. Every day, Jerry eked out a living, arriving before dawn and leaving after dark.