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Which Franchises are Failing the Fastest? (2024)
Written by: Patrick Findaro
Last Updated by
Facundo Bermudez : July 19, 2023
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Franchises have long held a captivating allure in the world of business and entertainment. They represent the embodiment of entrepreneurial ambition, creating a blueprint for success that can be replicated and expanded upon. From the enticing aroma of a beloved fast-food chain to the enchanting narratives of blockbuster film series, franchises have embedded themselves deeply into our collective consciousness. However, behind the glitz and glamour lies a harsh reality. Not all franchises withstand the test of time, and some suffer the fate of downfall, losing their once-thriving units and slipping into obscurity. It is this poignant aspect of the franchise world that beckons our exploration and raises the question: Which Franchises are Failing the Fastest?
Contents
Which Franchises are Failing the Fastest?
In this comprehensive article, we embark on a journey to shed light on the fallen titans of the franchise industry. We delve into the stories of franchises that experienced significant declines, witnessing their seemingly unshakable empires crumble under the weight of numerous challenges. From the golden arches of fast food to the iconic logos of retail giants, we will examine the factors that led to their losses and the lessons we can learn from their demise.
Franchises, by nature, are built on the foundation of replication and expansion. Their strength lies in the ability to establish a successful model and replicate it across various locations, offering customers a familiar experience wherever they go. Yet, even the most powerful of franchises can be susceptible to an array of factors that chip away at their once unassailable reign.
Market saturation, changing consumer preferences, economic fluctuations, mismanagement, or simply the passage of time can all contribute to the erosion of a franchise’s dominion. The relentless pursuit of growth and expansion can sometimes blind even the most seasoned business minds to the signs of impending decline. The cautionary tales of franchises that lost the most units serve as a reminder that success can be fleeting, and complacency can pave the way to downfall.
U-Swirl
U-Swirl is a self-serve yogurt bar franchise that has seen a significant decline of 68.72% in its growth rates from 2016 to 2022. While they opened 19 new units in 2016, they only opened 6 in 2022. Unlike conventional frozen yogurt shops, U-Swirl provides a unique approach that puts the customer in control. Instead of waiting for service and having to settle for a limited amount of toppings, U-Swirl lets the customer pick up a cup, swirl it with any combination of yogurt flavors, and then top it off with their choice of toppings.
This model allows for complete customization and an array of possible flavor combinations, offering a unique dessert experience that caters to a broad range of tastes. Customers can opt for a healthy snack with fruit and nuts, or indulge in a decadent treat with candy and chocolate toppings. Despite this unique and appealing service model, the company has struggled with a significant downturn in recent years.
U Got Stink
U Got Stink? is another company that experienced a dramatic decrease in growth, with a decline of 68.29%. While they opened 41 new locations in 2016, by 2022, they were only opening 13. Specializing in odor removal, U Got Stink? provides an essential service to households, vehicles, apartments, RVs, and hotels. The company understands that odors can be embarrassing and can negatively impact one’s perception of a space. Their trained technicians work to resolve odor issues, whether they be from smoke, pets, or body odors. The company takes pride in its proprietary process that uses specific self-breeding enzymes. These enzymes, once applied, create a breeding process that removes whatever objection may be present, leaving the area free of any unwelcome smells. Despite the clear need for such services, U Got Stink? has seen a significant reduction in its growth rates, which may indicate challenges in market saturation or competitive pressures.
Chili's Grill & Bar
Chili’s Grill & Bar, an American casual dining restaurant chain, has seen a substantial decrease in its growth rates, with a 60.51% drop between 2016 and 2022. It dropped from opening 433 locations in 2016 to 171 in 2022. Founded in Texas in 1975, Chili’s operates as a full-service dining restaurant, offering a range of dishes from hamburgers to Tex-Mex cuisine. Its broad menu is designed to cater to a variety of palates, offering American food, dishes influenced by Mexican cuisines, such as spicy shrimp tacos, quesadillas, and fajitas, as well as a selection of hamburgers at an affordable price.
Furthermore, Chili's strives to cater to all customers by providing a nutritional menu, an allergen menu, and a vegetarian menu. Despite its wide range of offerings and its efforts to cater to various dietary preferences, Chili's has seen a marked decline in its growth rates, suggesting that it is facing significant challenges in the competitive casual dining sector.
Tapioca Express
Tapioca Express, a Taiwanese-American fast food franchise chain, has experienced a significant decline in growth, with a decrease of 40.91%. They dropped from 44 to 26 new locations between 2016 and 2022. The franchise is known for introducing the boba drink culture to the United States in the late 90s. Tapioca Express specializes in bubble tea, coffee, a variety of fruit juices and slushes, small meals, and light snacks. Since its introduction, they have introduced over 100 drinks to its menu, ranging from a variety of juice, tea, coffee, and of course milk tea drinks. Their trademark items are the “Snow Bubble” and “Yogurt Frost”.
Food items include crispy chicken, crispy chicken wrap, calamari rings, and pot stickers, as well as other various Taiwanese snacks. Despite its successful introduction of a new drink culture and a varied menu, Tapioca Express has seen a downturn in growth, which could be attributed to various factors such as increased competition or changing consumer preferences.
Purrfect Auto Service
Purrfect Auto Service saw a 38.71% drop in growth. It is a franchise business with multiple locations throughout California and Nevada. Purrfect opened 31 new units in 2016, but only 19 in 2022. Each location is independently owned and operated by entrepreneurs. The company provides a one-stop solution for customers’ automotive maintenance needs, including fast lube, brake system repair, smog inspection, air conditioning system service, and general repair. Purrfect Auto Service is also known for its family-oriented approach and corporate standards that prioritize excellent prices and services.
They pride themselves on offering honest services, returning all non-hazardous parts, providing written warranties on all work, and offering free vehicle inspections with a written estimate. They specialize in various types of car repair, automotive diagnostics, and professional vehicle services. Furthermore, they also offer a free shuttle service within 5 miles of their location for any major repairs requiring more than 2 hours.
Flowerama's
Flowerama’s roots began in 1952 with a company called Frink’s Green House, Inc. This company was founded by Maurice and Herbert Frink, who were sons of a Waterloo, Iowa florist, and has experienced a 34.55% decrease in growth. It dropped from 55 to 36 new stores between 2016 and 2022. They started their business with a 50,000 square foot greenhouse operation, which expanded to include a second 60,000 square foot range in Waterloo in 1965. They eventually became suppliers for over 250 retail outlets, primarily in Iowa and several other Midwest states. Today, there are more than 60 freestanding Flowerama centers across the country.
The company was acquired by 1-800-Flowers Retail, Inc. in 2011, making Flowerama part of the largest floral franchise organization in the world4. Flowerama’s basic merchandising approach involves making quality products conveniently available at affordable prices. They offer quality floral products and arrangements to the public at prices typically lower than conventional florists, achieved by purchasing flowers on a volume basis directly from brokers and growers and using a cash-and-carry approach to merchandising.
Summary
The article presents notable examples of franchises that have experienced significant declines. U-Swirl, a self-serve yogurt bar franchise, has faced a decline of 68.72% in growth rates, despite offering a unique and customizable dessert experience. U Got Stink, specializing in odor removal services, has seen a decline of 68.29% in growth, highlighting potential challenges in market saturation or competition. Chili’s Grill & Bar, a popular American casual dining restaurant chain, has suffered a substantial drop of 60.51% in growth rates, suggesting difficulties in the competitive casual dining sector.
Tapioca Express, a Taiwanese-American fast food franchise known for introducing the boba drink culture, experienced a decline of 40.91% in growth, possibly due to increased competition or evolving consumer preferences. Purrfect Auto Service, a franchise offering automotive maintenance solutions, saw a 38.71% drop in growth, while Flowerama, a floral franchise, experienced a 34.55% decrease, despite its history and affordable pricing approach.
