Busting Business Franchise Myths
Owning a franchise is like running your own business, and it does come with its fair share of risks and rewards. Let's bust a few for you if you want to separate the truth from the franchise myths around running a franchise.
Shaun M Jooste, writer
Published at 14/04/2018, Updated on 20/06/2023 , Reading time: 4 min
- Franchises Are Expensive
One of the best things about owning a franchise is it comes with a flexible business plan. Certain franchises, like a 7/11, can be started with as little as £7,000, while a large business could cost around £350,000. If you want to start small, you can invest a little money and put in more as you earn from the business. Franchise investments can fit into your budget conveniently. You just need to look for one you like and get started.
- Franchise Owners Aren't Business Owners
It's common to feel like the franchise owner runs the business and you're merely an employee. This, however, couldn't be further from the truth. You have to make many entrepreneurial decisions that focus on the risk and rewards of the business. While franchise owners will guide you, they do not hover over you or make you feel like you work under them in any way. They make you feel like you're always in control.
>> Read also : FRANCHISE MYTH : You have to make a huge investment
- Someone Without Experience Can't Run The Business
The best thing about a franchise is that it comes with a business plan designed to succeed. All you need to do is focus on and implement the plan correctly. Franchises also provide training, support, information, and tips on marketing along with the necessary material to promote the business and constant interaction to guide you as you move forward. This helps people with little or no business knowledge to run one successfully.
- Agreements Are Non-Negotiable
Although there are plenty of instances where a franchisor is said to be rigid in terms of royalty or fees, these franchise agreement terms are not set in stone. This essentially means that if you have the right negotiation skills and the right lawyer, you will manage to sweeten the deal.
- No Creativity Allowed
There is no room for creativity. This is not true in many ways. While there will be a fixed business plan and tips on generating maximum revenue, you still have the freedom to run things as you like as long as you follow the guidelines set by the franchise owner. You'll still control who you employ, how you make marketing decisions, and the day-to-day operations.
- Franchising Is Limited To Retail or Food Chains
While you see a lot of food chains and retail franchises around you, they're not the only kind of franchises around. The options are limitless, and when you look in the right places, you'll see that you can run a franchise for anything ranging from healthcare to sports and even educational institutes, depending on what suits your budget and taste.
- No Freedom
If you think there's no freedom in running a franchise, you should know you're in complete control of the business. The franchisor will not visit your establishment daily or tell you how to run things. That's something you can choose to do freely.
- It's Guaranteed Success
Although starting a franchise is less risky than opening your venture, you still have to take some risks. You must consider various factors, including location, franchise fees and royalties, similar businesses in the area, marketing plans, and more, that help your business succeed, but there's no guarantee it will. You have to look at the need for the business in the area and other factors and wait a couple of months to see how your franchise performs.
- It Can Run Without My Support
This is one of the biggest reasons a franchise will fail. You have to be able to spend time on your business and ensure it's functioning correctly. You must try to get your employees to run the place well. A lot goes into the smooth functioning of a business, and the most important is an authoritative figure. You must be available to support, guide and keep your employees in place so the business can grow.
- It's Easier Than Starting a Business
Starting a business might be tougher than branching out into a franchise initially, but it's the same from there. You'll need to follow the business plan and work towards your goals if you want it to be successful, just like you would for a business you'd start.
- Big Brands Work Better
Choosing big brands comes with its pros and cons. The most obvious is that the bigger the brand, the more it will cost you, and that's only feasible for some. Also, large brands tend to have their outlets scattered across the city. This makes it challenging for your franchise to compete with them because they put more effort, money and branding into their stores.
- It's Easy To Shut Down or Exit a Franchise
It's not! Most franchise owners want to hold on to their franchises as much as possible, so they'll try their best to twist your arm during the agreement stage itself. You must have all the clauses mentioned correctly to be smooth when required. You can also consider a resale, in which case you won't need to terminate the franchise, and the franchisor is also happy.
Setting Reality from Franchise Myths
Now that you know the truth about owning a franchise and all myths have been debunked, you can start exploring the most popular franchise business options you think suit your taste best. It's important not to get too excited and keep your emotions in control before signing the dotted line. It's also vital to go through the agreement minutely and fix any clauses you feel aren't in your favour.
Shaun M Jooste, writer