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Every franchisee wants to turn his or her franchise into a successful business that benefits its community. But as with every industry, there are pitfalls that franchisees must look out for. One that is common in the franchise industry is referred to as the “coattail effect.”

In franchising, the coattail effect refers to a situation where franchisees who are prosperous and doing well may be forced to shut down due to the failures of franchisees who own a franchise of the same brand. Customers may have bad experiences with a franchise of a specific brand, and then that stigma spreads to all of that brand’s franchises. It’s an unfair situation, but luckily, there are ways to overcome it.

Below are three methods that may help franchisees to beat the coattail effect.

Change Up Your Business Strategy

One way to avoid the impact of the coattail effect is to change your business strategy. If you are following a similar strategy that has led to the fall of franchises like your own, then you should look to switch up what you are doing. Take the time to thoroughly look over your current business strategy to find areas where improvements can be made.

Once you have identified weaknesses in your current business strategy, you can change them and present them to your team, and then eventually start to implement them in your day-to-day routine.

Amplify Your Marketing Efforts

Your customer base is vital to the health of your franchise. If you are worried about the coattail effect harming your standing with your customers, you should consider giving your marketing strategy a boost to let your customers know your franchise is still trustworthy. The better you can communicate with your customers and assure them that nothing has changed, the more likely they are to come around.

This change in marketing tactics could be done through email and social media. You could even offer customer appreciation deals! You will want to do all you can to let your customers know they are valued.

Communicate With Your Franchisor

Your relationship with your franchisor is important for many reasons, but when it comes to dealing with the coattail effect, it’s important that you can communicate any concerns you may have.

Together, the two of you can work on finding solutions to your problems.

If you are ready to start your career as a franchisee, get in touch today to get started with a free consultation!