Failure is the best teacher. For some, that lesson comes harder, and leads to the closing of a business. But these former business owners are not the only ones who can learn from their mistakes. Other franchisors can have that chance too. Here’s a list of franchises we can learn from, and why they failed.
Opening in 1957, Sambo’s restaurants faced controversy early on. Despite their claim that “Sambo” came from the founders’ names, it couldn’t justify the caricature of Li’l Black Sambo so easily. Rebranding could have saved this company had they done it earlier, but even trying to become “The Jolly Tiger” couldn’t undo the damage of poor corporate-level decisions that made it grow too quickly.
Seeing the popularity of White Castle, John E. Saxe decided to imitate. They copied much of White Castle, down to the menu, advertising, and architecture of the restaurant. But as popular as this might have made them, they would have been better off distancing themselves a little further. Legal action from the original chain made them change their branding tune, and this ultimately killed White Tower.
This food chain, popular in the 60s and 70s, once was a real challenger to McDonald’s. They were the first to develop a flamed-broiled burger, a self-serve bar, value combos, and a “Funmeal.” However, this company closed its doors for good in 1996. Why did it fail? It tried to do too much too fast. This rapid expansion helped bring Burger Chef to its knees.
Though you’ve got great ideas and you need to get them out before your competitors, make sure you’re not growing faster than you can handle!
Other franchisors will always see your success and try to imitate it. To avoid going under or losing customers to them, you have to stay on the edge in product and service.
Another once-challenger to the might of McDonald’s, Henry’s had over 200 restaurants by the early 60s. That’s more than McDonald’s had at the same time! But they could not adapt to the changing industry, as dozens of other hamburger chains began popping up. For example, as other chains began adding drive-thru pickup, Henry’s failed to do so. Plus, they had the disturbing controversy of possibly using horse meat.
With the advent of streaming services and more convenient DVD rentals like Redbox, the once-common Blockbuster began shutting down in 2013, after going bankrupt in 2010. Their attempt to stick to their old model backfired, closing the vast majority of their stores. Imagine if Blockbuster had changed with the times instead of holding onto the DVD rental model. We might still see them around!
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