How franchisees get blinded by unrealistic optimism

"Anyone starting their own business needs a healthy dose of optimism. But recent research suggests that those buying into franchises are too optimistic and blind to some of the risks they are taking. Franchising appeals to a wide range of people who sometimes don't have experience in running a business – wage earners who have lost their jobs; retired, professional sportsmen whose careers have come to an end; military personnel who have left the services; and migrants who may have poor English but are keen to work. When it works well, franchisees buy into an already successfully franchised brand and receive training and support from the franchisor as they grow their own business. However, research by Jenny Buchan and her colleagues Uri Benoliel and Tony Gutentag, calls into question the effectiveness of disclosure regimes, which are designed to make potential franchisees aware of the risks." Jenny Buchan, BusinessThink, 14 February 2017 Read more