By Laura Darrell, author of The Principles of Franchisee Success and the upcoming Franchisee Success Series
Year one as a franchisee is often a whirlwind of activity. You’ve invested capital, signed the lease, completed the training, and opened your doors with a mix of hope and adrenaline. And while the franchise model offers proven systems, it doesn’t eliminate the learning curve that comes with owning and operating your first business.
Over the past two decades, I’ve worked with hundreds of franchisees, both new and seasoned, and certain patterns have emerged time and again. Some of the most common early-stage mistakes aren’t operational in nature; they’re leadership and mindset-related. And while they’re understandable, they’re also avoidable with the right preparation and awareness.
Here are three of the most critical mistakes I see new franchisees make in their first year, along with strategies to avoid them.
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Trying to Do Everything Themselves
One of the most consistent patterns I’ve observed is the tendency for new franchisees to overextend themselves. Whether driven by pride, fear, or a sense of obligation, many first-year owners fall into the trap of becoming the business rather than building it.
It’s easy to understand why. In the early months, there’s a strong pull to prove yourself, to your franchisor, your family, your community. However, wearing every hat — manager, marketer, technician, trainer, and bookkeeper — doesn’t lead to success. It leads to burnout, inefficiency, and stalled growth.
What to Do Instead:
Shift your thinking from “doing” to “building.” Your goal isn’t to be the best cook, cleaner, or closer; it’s to develop a team that can deliver results without needing your involvement in every detail. Start identifying and developing talent early. Coach, delegate, and create simple systems others can replicate.
In my work, I encourage franchisees to create a “Leadership Bench” plan within their first 60 days. Who can be coached into more responsibility? Who demonstrates initiative? Who needs additional training? This early investment in people is often the difference between a business that survives and one that scales.
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Delaying Financial Discipline
Many new franchisees open their doors with a basic understanding of financials but underestimate the frequency with which they’ll need to monitor and manage them. Sales figures might provide a sense of momentum, but they don’t tell the whole story.
In fact, I’ve seen franchisees hit their revenue targets while unknowingly losing money due to unmanaged food costs, labor inefficiencies, or a misalignment between pricing and operating hours.
What to Do Instead:
Develop a weekly rhythm for reviewing your financials, not just your top-line sales, but your prime cost, labor productivity, and break-even thresholds. Understand what each hour of operation costs to run, and ensure your staffing, pricing, and promotional strategy align with that reality.
If you’re not confident reading a P&L or analyzing the cost of goods sold, don’t wait until your accountant tells you something’s off. Ask your franchisor for sample financial dashboards or connect with an experienced franchise mentor who can walk you through the numbers in plain terms.
Your financials are not just a report card; they are the diagnostic tool that helps you lead, adapt, and succeed.
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Focusing on Product Over People
Many new franchisees mistakenly believe they are in the food business, the fitness business, or the retail business, when in fact, they are in the people business.
In year one, it’s tempting to focus on perfecting operational checklists and brand standards. Those are important, of course. But your long-term success will be determined not by how clean your store is on inspection day, but by the quality of the team you build and the culture you create.
Team turnover is one of the most damaging issues in a franchise’s first year. Every time someone leaves, you lose momentum, consistency, and often, the trust of your guests.
What to Do Instead:
Treat talent as your top priority. Develop a thoughtful hiring process that screens for alignment with your values, rather than just availability. Take onboarding seriously. Recognize and reward effort early and often. And above all, lead with clarity, appreciation, and consistency.
First-year franchisees who succeed tend to be those who understand that their primary job is to develop people. Yes, you are delivering a product or service. But that delivery happens through your team. If they’re not supported, coached, and appreciated, your business will struggle, regardless of how good the product is.
Final Thoughts
The first year of franchise ownership is intense. It’s also one of the most critical periods for laying the foundation of a sustainable, scalable business. While challenges are inevitable, many of the most damaging mistakes are preventable with the right mindset and habits.
You don’t need to be perfect; you need to be coachable. You don’t need to be an expert in every department; you need to build a team that’s committed and capable. And you don’t need to wait for financial or people problems to become urgent; you need to lead with discipline and intention from day one.
The franchise model offers the structure. Your job is to lead within that structure in a way that creates momentum, not dependency.
If you avoid these three mistakes, and more importantly, build the habits that counteract them, you’ll be well on your way not just to surviving your first year, but to setting the stage for long-term success.
