The franchising industry is resilient and, when concepts are properly applied and managed, can be very profitable. Yet misconceptions about franchising still exist, and if you accept them at face value, there’s a good chance you’re robbing yourself of an opportunity that can be both financially and personally rewarding.
So before you make up your mind, here are eight franchise myths that will help you realistically evaluate whether buying a franchise is right for you.
I’ll only be successful if I find the right business
Many of us define ‘right’ as what we’re already good at. But don’t limit yourself. Define your transferable skills from the corporate world: Delegation, management, marketing, sales. If you had them in one type of business, you can easily use them in another.
I can only be successful doing something I love
Believe it or not, businesses based on an owner’s background have the highest failure rate. This is in part because you think you know everything you need to know already. If you limit your choices to what you’re familiar with or good at, you’re placing yourself at a major disadvantage by ignoring a huge number of possibilities that are outside your realm of past business experience.
I can’t be in a business I know nothing about
Of course you can. It’s natural to want to stay in your comfort zone and stick to areas you have experience in. But as a franchise owner, your job is running and growing your business, no matter what it is. Remember, you have transferable skills. Franchisors also like ‘fresh’ franchisees who they can teach their systems. So, your road to success is buying into and learning the franchise system and then using your talents to make it grow.
There’s no freedom in a franchise – head office dictates everything
This is one of the most pervasive myths about franchise ownership. In reality, there’s tons of room for individuality. The franchisor ‘dictates’ only one thing: The basic system – the framework that’s already proven to be successful.
Beyond that, you’re in charge. You’re managing your business, staff and customer experience. You decide who to hire and fire, how to market your location and how to promote it regionally. Keep in mind that the franchisor wants you to succeed, because if you don’t, they don’t.
Franchises stifle creativity
Again, this is patently untrue. The only limitations you have are those that have already been proven to generate income. This might include signage, uniforms, formulas, protocol, and so on – the basics that allow you to represent the brand and your own location as professionally as possible.
But it’s up to you to think up new ideas and make suggestions to head office. In fact, most franchise parent companies encourage suggestions, because it’s where they get many of their best ideas. McDonald’s corporate, for example, didn’t come up with the inspiration to start selling breakfast. The concept of the Egg McMuffin was developed by a franchisee.
I can’t afford a franchise
Sure you can, if you look at it for what it is: An investment in your future. While there are a number of concepts that start in the millions, established and affordable concepts exist. Different franchises also have different fee structures. Some don’t require a monthly management fee, others have fixed royalties.
Beyond that, your out-of-pocket expenses are the same as they’d be for any business – salaries, local advertising, etc. The difference is you have the support and training of the franchisor, which will help you ramp up to full speed far more quickly than you could on your own.
I’ll instantly know the right opportunity when I see it
Many people want to fall in love with their business at first sight. That’s an emotional decision, not a career choice. You have to take the time to learn about the details and nuances of an opportunity to understand its potential. You simply can’t do that when you make a determination based only on what you feel today.
I’ll have to quit my job to become a franchisee
While the larger and more established franchises require franchisees to be owner-operators, there are some designed for people who are working other jobs. While franchises can fail, it’s not always down to how much time the owner spends at the store.
Nine times out of ten it’s because of deviating from the system and cutting corners by using inferior materials or altering formulas. When you are ready to leave your job, you’ll want to leave the habits of the corporate world where they are and bring along your marketable and transferable skills.