When it comes to franchising, there are many common myths that can put off prospective franchisees and influence their ability to start a business. When making a decision regarding franchise ownership and buying a business, it’s important to separate fact from fiction.
Franchising has its own share of pros and cons – use these to weigh your options and determine the best course of action for you. The more you research and prepare for business ownership, the more successful you are likely to be.
In this article, we will explain 8 common myths about franchising that may be holding you back. We’ll uncover the truth behind these myths to give you a more accurate perspective of franchising.
1. Franchising is a huge upfront investment
When you think of franchising, having a large sum of upfront capital may spring to mind. However, this is not always the case. With over 3000 franchises in 75 different industries, a large amount of which requiring under $100,000 of investment to operate.
2. You should only buy into an industry you are passionate about
Whilst being passionate about the franchise you’re in should be an important aspect of your decision, it shouldn’t be the only factor to consider. For some people, passion may revolve around giving back to the community, or the thrill of simply running your own business. However, simply buying a franchise because it is a hobby of yours can quickly lead you to fall out of love with that hobby.
When exploring franchise opportunities, pay attention to the business model, company culture, and leadership team. You’ll want to take efforts to ensure it is a business you will enjoy operating long-term (or hire a manager to operate it for you!).
3. Franchising in only for fast-food chains
When you think of the word “franchise,” fast-food chains may automatically spring to mind, the likes of McDonald’s and Burger King. However, thinking that franchising only applies to fast food businesses is limiting your potential! There are over 75 industries in which franchising applies to, many of which are in the health and wellness industry – a far cry from the unhealthy likes of fast-food chains.
4. Franchising guarantees your success
This one is not necessarily untrue but, as with any business, franchise success depends on a lot of different factors. Buying a franchise doesn’t automatically entitle you to lifelong business success. There is always going to be a period of hard work and perhaps some challenges along the way. After all, you are still the business owner and you will have to put in the work if you want to see it succeed.
However, franchising does offer many benefits that may increase your chances of success and lead to an earlier revenue stream than starting a small business from scratch.
5. Food franchises are best because they are recession-proof
Despite the fact that we all need to eat, due to high competition food franchise systems aren’t recession-proof. Going into a franchise with the mindset of it being recession-proof can only hinder your success. You should always plan accordingly.
6. Invest in a trendy franchise
Unfortunately jumping into a franchise just because it’s trending at the moment is not always the best reason to buy one. When deciding to buy a franchise, you should pursue something you can see yourself owning long-term. Moreover, it’s important you have an understanding of the franchise agreement, contract, and business plan. You should have a firm grasp on the legal holding of your franchise and how to set performance expectations.
7. Find a territory with no competition
For many prospective franchisees, the thought of having no competition sounds like a dream. However, there are often many reasons why this is the case. For example, there could be no market for the products/services due to the demographic or age of local residents.
When buying a franchise, you should thoroughly review the local market and competition. Many franchisors can assist you with this process (they want to see you succeed too!).
8. The franchisor takes care of all of your marketing
Brand-wide marketing campaigns will likely be available from the franchisor, but you will also need to take a hard look at your local advertising strategy. Every market is different, and it’s important to track your results so that you can make adjustments as needed. The franchisor will be there to support you but it is ultimately up to you to create a successful business.
Deciding on a franchise is a big decision that should not be taken lightly – don’t simply take what you hear or read about at face value. Do your research, ask questions of the franchisor, and make sure the business model aligns with your wants, needs, and lifestyle. With proper preparation, you can benefit from the independence, profitability, and satisfaction that thousands of other franchise owners are experiencing.