Myth: Anyone can be successful as a franchise owner
Reality: Though by buying into a franchise you increase your chances of creating a thriving business, success is never guaranteed. Factors such as market saturation, training, support, location, the economy, and how closely you adhere to your business plan will all play a part in whether your business will grow and succeed.
Myth: Running your own franchise is an easy way to make money
Reality: Like any business, building a successful franchise will take time and dedication, and even once it is off the ground there will still be lots of work involved. If you are looking at franchising as a simple get rich scheme, you will be disappointed. Despite the fact that there will be a framework in place to smooth your transition into business ownership, you will still need a solid work ethic and willingness to put in the hours in order to be successful.
Myth: Choosing a well-known brand makes for a better franchise
Reality: Though you can benefit from starting up an established and easily recognizable franchise, it doesn’t mean that is the only way to go. If you are considering a popular franchise, you will still want to investigate the kind of training and on-going support you will receive as part of a chain, and whether other franchisees are happy with the quality of products and direction they receive from their headquarters.
In some cases, you may find a small scale company is a better fit, offering more one-on-one attention and a product or service with wide market appeal that will draw a healthy customer base despite flying under the radar.
Myth: Higher franchise costs mean a higher return
Reality: Just because you have to pay more into your business doesn’t mean you are guaranteed higher returns. For example, a high-cost restaurant franchise may actually bring in less money once you factor in the overhead compared to a small-scale copy and print franchise that has less expenses. A better way to operate is to choose a business that fits within your particular skill set in an industry where you are comfortable so you can immediately hit the ground running and begin turning a profit in a shorter timeframe.
Myth: Starting a franchise is less expensive than starting your own business
Reality: The startup costs for starting a franchise, including real estate and supplies, are often the same as for starting an independent business venture, plus you will be paying franchise fees and royalties to your parent company for the use of their trademark and business model.
Myth: When you purchase a franchise you will be your own boss
Reality: Though you may have a certain amount of freedom and flexibility as a franchise owner, you will still have to work within the company system and often must adhere to pre-set standards for wages, suppliers, the products you are able to offer, and hours of operation.
Myth: It is best to avoid a competitive market
Reality: Though you may be guaranteed no direct competition from fellow franchisees in your specific area, you will encounter other businesses offering similar products or services. This competition is not necessarily a bad thing and can, in fact, become a catalyst to improve your own methods and tighten up any lax business practices. Additionally, by having healthy competition in your area of operation, together you may attract more customers and build a solid foundation for future demand.
Myth: I don’t need to hire a lawyer or an accountant when starting up my franchise
Reality: For your own protection, lawyers and accountants should be consulted as early as possible in the franchise purchase process, to ensure you understand all legal and financial liabilities before you sign any papers. By making an initial investment in the services of a skilled lawyer and accountant you can save yourself any hassles down the road due to oversights in business development and financial dealings.