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Some sources say that the average stand-alone small business has a 75% chance of failure in its first five years of operation. Prior to franchising, any business should operate a pilot operation, at arms length from the main business, for at least a year to prove that it has a viable franchise concept.
In fact, it is highly desirable for an intending franchisor to open several outlets using their own capital in which they can test the adequacy of their franchise systems, procedures, training, etc. The lessons learned during this phase will reap dividends after the successful commencement of franchise operations
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