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It’s about time franchise brands roll up their sleeves and jump in the trenches with franchisees at the first sign of trouble, says Nil Naik, founder and CEO at ‘franchisewith us’ Franchisors, thewait and see approach doesn’twork ranchise systems have long been seen as one of the most effective methods for rapid business expansion, offering entrepreneurs a proven model and a recognised brand to work with. However, it’s not uncommon for some franchise locations to underperform. A worrying trend is that many franchisors don’t adequately address the operational inefficiencies or performance shortfalls of these struggling franchisees. Instead of taking a proactive stance, they deal with the consequences once the damage is already done. This issue stems from a lack of operational awareness among franchisors. Many owners don’t know enough about the day-to-day mechanics of their franchisees’ businesses and fail to detect early signs of decline. This creates a serious gap between the brand’s potential and its real-world performance, often leaving franchisees to fend for themselves when they encounter challenges. One of the critical points that franchisors need to understand is that underperformance doesn’t happen overnight. In most cases, the warning signs start to appear within days or even a couple of weeks before the situation becomes dire. Indicators include a decline in transactions, customer dissatisfaction, or an increase in operational costs over a short period, like two weeks. By closely monitoring these indicators, franchise owners have the opportunity to intervene early. Yet, many of them either fail to recognise these signs or choose to ignore them. They wait until a significant amount of damage has been done, at which point it’s often too late. Proactivity is key to ensuring a franchise system thrives. Instead of allowing months of haemorrhaging performance, franchisors should work closely with franchisees from the very first signs of trouble. This involves more than just surface-level engagement; it means getting into the trenches, understanding the operational struggles faced, and collaboratively identifying solutions. By doing so, adjustments can be made to mitigate losses and potentially turn around the underperforming location before it becomes a financial drain. Unfortunately, what often happens is quite the opposite. Many franchisors choose to overlook the problems that are right in front of them. They may receive reports showing a drop in sales or hear complaints from franchisees but take no immediate action. Instead, they adopt a “wait and see” approach, hoping the issues will resolve themselves or the franchisee will figure out a solution. Six months down the line, after continued financial bleeding, the franchisee is often left with no choice but to ask for a royalty break or financial concessions to keep their business afloat. At this point, the relationship between the franchisee and franchisor has likely been strained, with trust eroding due to a perceived lack of support. This reactive approach is detrimental to the health of the franchise system. It creates a toxic environment where franchisees feel abandoned and unsupported, franchisors are left dealing with avoidable crises. It’s a lose-lose situation that could be easily prevented with better communication, operational understanding, and a proactive strategy. Franchising is going to become more competitive. Consumers expect high standards, consistent service, and quality products. For franchisees to meet these expectations, they need more than just a recognisable brand. Franchisors must step up their game by monitoring performance indicators closely and intervening at the first sign of trouble. They also need to understand that being proactive is not just about preventing short-term losses; it’s about fostering long-term success.When franchisees feel supported, they’re more likely to stay motivated, invest in the business, and contribute positively to the overall brand image. The future of franchising will belong to those who are willing to engage deeply with the operational realities of their franchisees’ businesses. Franchisors need to adopt a hands-on approach, monitoring performance, identifying potential problems early, and working collaboratively with their partners to find solutions.Waiting until the damage is done and then negotiating royalty breaks is not a sustainable strategy. Instead, proactive engagement and operational awareness are the keys to ensuring that both franchisors and franchisees thrive in an increasingly competitive marketplace. Franchise owners who fail to adapt to this new reality risk falling behind, while those who take a proactive approach will be well-positioned for success in 2025 and beyond. F Nil Naik Nil has spent more than 25 years in franchising – first as a franchisee and now as a consultant to many growing franchise brands in the UK and beyond. He is the founder and CEO of platform ‘franchise with us’ which helps to devise growth plans for those looking to grow locally, nationally, and internationally. 9 WHAT-FRANCHISE.COM Opinion