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Challenges Facing California Franchisors : Choosing the Right Franchisees

In order to build your brand and successfully expand your franchise network, it is important to select the right franchisees, especially in the beginning. You want to ensure that you are attracting the type of franchisee who has the skills to execute the business plan for your franchise, but you are also usually looking for a candidate with sufficient capitalization. One of the primary business reasons for the failure of a franchisee is under capitalization - they simply don't have enough financial reserves to get the business up and running and sustain operations through the ramp up stage until the franchisee is profitable. It's one thing to have enough money to pay the franchise fees and get the doors open, but in order for your franchise business to thrive you need to recruit franchisees who have the reserves and the business savvy to see things through.

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