An old joke but a fundamental problem for most franchise investors.
Franchising is a thousand times more complex that I ever imagined.
While I admit I am not the sharpest knife in the drawer, after studying franchising for over 10 years, there are issues that are only now becoming clear.
The problem is that I overestimated what I knew about franchising.
There is an excellent 14 page paper that everyone should read called Unskilled and Unaware of It: How Difficulties in Recognizing One’s Own Incompetence Lead to Inflated Self-Assessments by Justin Kruger and David Dunning of Cornell University.
Abstract: People tend to hold overly favorable views of thier abilities in many social and intellectual domains. The authors suggest that this overestimation occurs, in part, because people ae unskilled in these domains, suffer a dual burden: Not only do these people reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the metacognitive ability to realize it…
The more I have looked into franchising, the more alarmed I have been not just simply because of the personal carnage but because I also discovered that most exiting franchisees misattributed the causes of their business failures.
Newbie franchisees got burned and they leave without knowing the true source of why they failed.
Without knowing an accurate reason, they and their families are vulnerable still to be taking a second time which is what happens in con games a lot (>50% marks good for a2nd go).
WikidFranchise.org is my attempt to allow people to see the similarities and differences between their experiences and others. think of WikidFranchise as a thousand and more case studies of franchise investors.
I think the overwhelming similarities in the way franchising is run suggest more of a systemic or structural problem, and less a personal cause.
Everyone is responsible for their own decisions, yes. But some decision making situations are so biased as to practically guarantee a pre-ordained, zero-sum wealth re-distribution outcome.