Debunking Franchise Myths
We all know the upside to franchising: proven franchise system, training and support, purchasing power, brand recognition, and lower risk of failure top the list. But before you utter those three little words, "it's all good," take a reality check. Consider this list of common myths surrounding franchising and get the true facts.
Myth
Success is guaranteed.
Fact
Franchising does increase your chances for success over going it alone, but it's not a magic solution. Any venture involves risks; a proven system merely lowers those risks.
Myth
You can be your own boss.
Fact
Yes, you will enjoy some perks as a business owner, but you still have to follow someone else's rules-the franchisor's. You may not have the power to make even the most basic decisions about hours of operation, pricing, suppliers, and marketing.
Myth
It's cheaper than starting from scratch.
Fact
The cost of starting a franchise is about the same as starting your own business when you consider the real estate, build-out, equipment, supplies, and advertising. You might get some price breaks from group purchasing, but royalty fees will offset any savings.
Myth
It's easy.
Fact
Don't assume that once you make your investment it's not going to be as hard as a regular non-franchise business. With a franchise it's going to be an easier transition and a lower chance of failure, but there's no way around it-running a business is hard work.
Myth
Bigger is better.
Fact
Bigger companies do offer some advantages like large-scale advertising, sophisticated systems, and more capital to support the brand. But smaller franchisers are often more flexible and responsive to franchisees.
Myth
A high-priced franchise will yield a bigger ROI.
Fact
Often the opposite is true. The price of the franchise has little to do with profit potential. You need to take into account numerous factors such as market conditions, system efficiency, location, and your own knowledge of the industry.
What Draws Investors to Franchising
Most prospective franchisees are drawn to the business by previous frustrating experiences in their past employments. This could have been caused due to lack of control over one’s work environment, being bound to report to superiors and insufficient room to exercise one’s authority at their work place. The micro- managing bosses, unresponsive organizational structures, or lack of voice in the organizations process are a few of the reasons why many people decide on investing in franchises as their new career. By investing in this business they take control over their own life with a little risk as compared to starting their own business from scratch.
Franchising with the Stars! Choosing the Size of your System
Every new franchisee wishes to own a large franchise. However it may not be possible for a multitude of reasons. Capital restrictions, lack of skilled labor and management, and even access to suppliers. Therefore before buying a franchise, one must consider all of the franchise options available to them. The following is a list of franchise favorites as well as the possible advantages and disadvantages of owning them.
