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We’d like to drop a quick line just to say that we’re nearing completion on a big project here at Franchise Direct. We can’t reveal any of the specifics at the moment, but you can be assured that it will be interesting. Keep an eye on the blog and on the Franchise Direct website for more information.

Yesterday we wrote about the benefits and risks of multi-unit franchise ownership. With a bit of research and pragmatism, multi-unit ownership can work for you. That said, business can be difficult sometimes and sometimes franchises fail.

Especially given the state of the economy at the present, failure is something that every franchisee and franchisor must confront. There’s no point in tip-toeing over the truth. Times are tough in the small business world. Only by acknowledging the chance of failure can we overcome it.

For a thoughtful meditation on the causes of failure in franchising and ways of overcome the stigma of watching your business collapse, we’d like to recommend the writing of Paul Segreto, who has a run multi-unit franchise and now blogs at franchiseEssentials.

We recently came across Paul’s thoughts on the subject of franchise failure and thought they were illuminating.

In this blog post, Paul frankly discusses how his franchise failed, and does not avoid pointing the blame at himself.

“Let me clarify something. I failed as a franchisee. Not because of anything the franchisor did or didn’t do but because I put and kept my head in the sand and did not face reality. I could go on and make excuses about things that happened around me but at the end of the day I could have turned things around if I got my own head out of the sand, made some difficult decisions and took full, immediate responsibility.”

Ultimately, though, having experienced the ups and downs of franchise ownership, Paul states that failure is something that he has learned from and the experience has inspired him in business.

“Yes, it was a tremendous learning experience but not one I would bestow or wish on anyone. Now, all I can do is to offer my experience to anyone in the franchise industry that needs assistance. As we’ve entered 2009 in the realms of economic uncertainty, I’m certain already difficult situations have been compounded but I’m confident a snap back to reality could only help. If just one franchise business is saved from the consequences of failure, then we’ve made progress. Progress we’ll continue to build upon.”

A dose of reality can prove quite beneficial when considering buying a franchise.

Picture this dreamy scenario: you’re a prospective franchisee with plenty of capital. You’ve got the backing of banks and a few investors to boot. You’ve got a business concept that is 99% certain to succeed. And best of all, you’ve discovered a large area with a great need for your service. Your inner franchising voice is telling you one thing: open a multi-unit franchise.

Don Daszkowski, who writes an excellent blog on the subject of franchising at About.com, has been wrestling with the pro’s and con’s of multi-unit ownership lately. Given the well-documented difficulties on the credit market at the present moment, not every prospective franchisee is thinking big, but nonetheless, it’s important to know the risks and benefits of multi-unit ownership if you are about to invest.

Daszkowski’s general advice is to urge franchisees against multi-unit ownership, unless they possess experience running larger operations. The first thing every franchisee must do is their homework. He also details the job demands of a multi-unit owner. Because of the scope of the operation, they are forced to run the units from a distance, at a macro level. This is somewhat different from the regular franchisee experience, which tends to be more caught up with the day-to-day, nitty-gritty obligations of business-ownership.

Start small is some other advice. See how you fare owning one unit and if you are really successful, then perhaps a second or third franchise will suit you.

Daszkowski shared his feelings on the industry with Entrepreneur magazine for their latest issue, as did Liberty Tax Service franchisee, Dan Castellini. The 33-year-old owns 10 Liberty Tax Service franchises. Experience has taught him what works and what doesn’t in multi-unit ownership.

“The No. 1 reason people fail going from one to two or multiple units is they tend to have an emotional connection to that original location. It’s their baby–and that doesn’t work. You’ve got to empower people at the first store and then spend as much time and energy getting that second location off the ground as you did with the first.”

A clear mind, versatility and an ability to see the bigger picture are all vital attributes when you’re making the leap into multi-unit ownership. It seems obvious enough, but try one franchise first and see how you fare. If you’ve found the business for you, the franchising system allows you to plant that system wherever you’d like.

One franchise sector that’s really taken off over the past few years is the green franchise industry. When you factor in the cost of investment and the risks involved with starting your own business, green franchises emerge as such as an exciting venture because they are clearly positioned to do well in the future.

Green franchises take the innovation of the green sector and match it with the tried-and-true business model of the franchising industry. The relative success of this business marriage has been chronicled in a recent story by Gwen Moran in Entrepreneur. The piece profiles California couple Mike and Deborah Parisi. The Parisi’s were ready to buy their own business, but they wanted to be sure that they were proud of their product and that their franchise helped the community. They settled on a green pizza franchise, Pizza Fusion, and have done so well, they’re considering opening up a second unit. Best of all, they’re delighted with what their success is built upon.

Everyone agrees that green franchises are rising. As Alisa Harrison from the IFA says, “We’re seeing it across the board, from existing franchises that are becoming greener to those who are building their whole concept around being environmentally conscious. The green trend has been growing for about 25 years now, but it has only recently become mainstream.”

The Entrepreneur story rightly points out that potential green franchisees should be wary of franchises that change their colors over night – that is, those that fabricate their green credentials.

Moran concludes: “The key to success in green franchises is to look for verifiable data that a market exists, either through a track record of sector sales or–especially for newer businesses–substantial market research that indicates both a strong customer base and strong demand. Franchisees who protect themselves through such due diligence could very well find themselves with businesses that provide both monetary and socially responsible rewards.”

Take this advice on board and you should find the green franchise for you.

In this week’s Franchise Update, we have news from the Small Business Administration, as well as news on fast food franchises.

Click here to download this week’s Franchise Update, or watch in the player below:

Reports in the Washington Post say that the US Treasury is now finalizing plans for a 15 billion dollar bailout of the SBA. The plan involves using funds from the federal bailout program to purchase SBA loans. IFA president Matthew Shay, along with other leading figures in the franchising industry, met with officials in the Treasury Department last week, in order to press for urgent action to shore up credit lines to small business.

A new report from CNN says that America’s big fast food chains are considering embracing environmentally-friendly buildings in what may be the future of architecture for food franchises. CNN states that McDonalds are rolling out test stores, like its one Cary, North Carolina which opened this week, that utilize green technologies such as energy efficient appliances, daylight-harvesting technologies and low-flow toilets.

Thanks for watching.