How to Become a Business Coach
How to Become a Business Coach

Business Coaching Franchise Failure Rate

By on July 1, 2018

Perhaps you’ve heard the statistic that only 5% of franchises fail within five years. But how does this compare to the business coaching franchise failure rate?

Before you buy this statistic hook, line, and sinker, keep in mind that the majority of franchises sold in the United States are what franchise expert Robert Purvin calls “blue chip” franchises–solid, respectable, enduring brands. This statistic originated in a study of those systems.

In contrast, most smaller franchises–including every one of the major business coaching franchises–are not in that category.

To put it bluntly, anyone who attempts to convince you to buy their business coaching franchise based on this statistic is twisting and misappropriating it.

Anyone who attempts to convince you to buy their business coaching franchise based on [the 5% franchise failure rate] statistic is twisting and misappropriating it.

After nearly two decades in the business coaching industry, I’ve seen business coaching franchise failure rates as high as 80 to 90%–something you probably haven’t heard from your franchisor’s sales rep! So before you buy into all the far-reaching claims about the success of franchises in general, make sure you investigate the particular franchise you’re considering…and ensure the numbers presented truly represent reality for that particular system.

And that means doing your due diligence.

Business Coaching Franchise Due Diligence

Before you make a huge investment in a business coaching franchise, consider the following due diligence steps:

1. If you’re talking with a business coaching franchise, evaluate their franchisees’ failure rate. See Section 2, Chapter 3, the third “checkbox” in the Business Coaching Franchise Buyer’s Due Diligence Checklist.

2. Pick up your own copy of Robert Purvin’s book, The Franchise Fraud: How To Protect Yourself Before And After You Invest, on Amazon. If you’re seriously considering a business coaching franchise, this book is definitely worth the read.

3. Grab our FREE ebook, The Business Coaching Franchise Buyer’s Guide! It’ll walk you step-by-step through everything you need to know before you invest.

Eric Dombach

About Eric Dombach

Eric Dombach is the Founder of Coaches’ Coach. In 2001, he founded a business coaching firm that, by 2005, was generating more than $1 million USD in revenue, 23% operating profit, and average annual growth rate of 140% per year. In 2005, he sold the firm to 4 of his employees for $1 million U.S. dollars, generating a return on capital of more than 800%. Since then he has trained more than 1,300 independent and franchise business coaches in the United States, Canada, Mexico, Europe, and Australasian markets.