06 February 2024 |

S8 E3: When a Fad Turns into Failure: How to Defeat the Franchise Hype Cycle, with Dru Capenito

By Adam Ryan

Everyone wants to be the next Crumbl. But let’s face it—not every new and hot franchise can be the next Crumbl. Fads aren’t always bad. But sometimes they can spell failure. So how can you protect yourself against becoming the next franchise fad failure?

The Wolf chats with friend of the podcast and franchise consultant, Dru Carpenito about the franchise hype cycle and how to avoid the pitfalls of investing in oversaturated franchise markets. 

What are the risks and rewards of investing in trending franchise brands? Is it worth the gamble or are the growing pains too much to overcome? Dru explains why finding the right operator is crucial and dissects the impact that copycat franchises can have on your business. 

And later, the Wolf and Dru delve into the role of private equity in franchising, discussing the growing prominence of brokers and franchise sales organizations. Learn why paying due diligence when evaluating franchise opportunities is key, and how to spot companies who may not be forthright with their financial disclosures. 

00:00:00 – The Franchise Hype Cycle: Oversaturation

00:02:33 – The Risk of Copycats in Franchising

00:09:57 – Navigating the Risks of Franchising

00:20:40 – Franchisees Need More Capital for Success

00:22:54 – Understanding Franchise Metrics: Key Takeaways

00:25:31 – The Rise of Franchise Fee Inflation

00:29:38 – The Reality of Franchising: No Passive Investment

00:35:20 – Finding Success in Home Service Franchises

00:42:03 – The Math Behind Home Services

00:47:21 – Culver’s: A Responsible Approach to Franchising

Paylocity offers the only modern HR and payroll solution that makes real-time recommendations to drive better business outcomes.

Paylocity is the modern, all-in-one platform that makes HR and payroll easier — so you can focus on your employees. We’ll make onboarding faster, recruiting smarter, and compliance simpler. To learn more visit paylocity.com/restaurants.

Follow Dru: 

LinkedIn: https://www.linkedin.com/in/drucarpenito/

Follow The Wolf: 

Newsletter: https://workweek.com/brand/the-wolf-of-franchises/

YouTube: https://www.youtube.com/@thewolfoffranchises

Twitter: https://twitter.com/franchisewolf

Website: https://www.krokit.com

And for exclusive insider content, don’t forget to check out my YouTube channel.

Are you a future franchise entrepreneur? Find all of the tools you need to launch, operate, and expand your franchise empire with the platform created by The Wolf himself, Krokit.com.

If you’ve enjoyed listening to Franchise Empires, I’d be so grateful if you could drop me a 5-star review on Rate My Podcast. Thank you so much!