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Warding Off a Franchise Mid-Life Crisis

Growth and Stagnation SignFranchises may not be animate things but, like the people that own them, they go through cycles of productivity.


“In lifecycle terms, business years are like animal years, where one year is equivalent to several human years. So after six years, a franchisee and [his or her] business may well be heading for a mid-life crisis,” according to Greg Nathan, CFE and founder of the Franchise Relationships Institute. “Not surprisingly, it is around this time that businesses start to plateau, unless a reinvention occurs.”


If a franchise mid-life crisis (or plateau) is to occur, it will likely happen during the maturation stage of the Franchise Relationships Institute’s six-stage Franchisee Business Journey. For reference, the six stages are:


  1. Investigation: the prospective franchisee assesses the business opportunity
  2. Initiation: they sign the agreement and are inducted into the franchisor’s culture and systems
  3. Perspiration: they face the challenges of building a team and growing sales
  4. Consolidation: everything comes together and the business starts to make money
  5. Maturation: routine sets in and business performance starts to wane
  6. Reformation: the franchisee makes a decision to reinvent themselves and their business


4 Ways Franchisees Can Guard Against Plateauing

There are numerous reasons franchises plateau. Here are some ways to try to avoid your franchise stagnating.


  • Make sure you’re engaged with the franchisor’s executive team. According to Greg, the average tenure of a franchisor executive is 3-4 years. This means during your franchise term there may be moments when you have more knowledge of the system than the executive in place. Instead of being potentially frustrated by executive turnover, use your knowledge to help move the system forward. You can do by actively attending the conferences and meetings virtually all franchisors hold for their franchisees on a regular basis.


  • Stay focused. It’s natural for your mind to drift after several years of doing the same thing. But when you feel this happening, remind yourself of why you started your own franchise. Also, revisit your adherence to the tenets of the system. As years pass, franchisees have a tendency to drift away from the franchisor’s system and training, which can undermine your potential.


  • Update your franchise. If you find your franchise has plateaued, it may be a sign your franchise needs an actual refresh. In fact, many franchises dictate an estimate for franchise unit updates within the “Other Fees” section (item 6) of their franchise disclosure documents. Consumers’ tastes change over time, and updating the physical premises, if you have one, could be the shot in the arm your business needs.


  • Get support if you need it. And not just in the business sense. Over the course of a franchise term, franchisees are not only running a business – they’re also living life. Life situations change over time, especially during a period of 7-10 years, which is the average first franchise term length. Don’t be afraid to reach out for assistance to manage the day-to-day pressures of franchise business ownership.
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