To many people, buying the rights to open a franchise seems like a perfect business idea. After all, everything is done for you and there’s not much work to do on your end. Plus, your business already comes with brand recognition and a loyal consumer base.
While there are certainly a lot of perks to operating a franchise, it’s not without its complications. To help you better understand the truth about operating a franchise, here are some of the top myths about franchises and the truth about this fascinating business field.
Myth: All Franchises Are Pretty Similar
This couldn’t be further from the truth. Franchises actually vary widely in their policies. Some franchises essentially pass all ownership over to the franchisee, only periodically touching base to make sure that their brand is being represented correctly. Other franchises essentially retain all control and the franchisee is more of a renter than an owner. Different businesspersons have different preferences for which types of franchises they prefer to operate.
Myth: Opening A Franchise Is Very Simple
Many companies present the image that becoming a franchisee is as simple as filling out their online form. However, these forms are usually just meant as a way for a prospective franchisee to get on a list to be contacted by someone at the company. In reality, most entrepreneurs need the aid of a franchise attorney when they actually begin the process of opening a franchise. The process is anything but simple.
Myth: Franchises Allow For Greater Earning Potential In The First Year
Most people know that new businesses rarely make a lot of money in their first year. Many people believe that franchises are exempt from this, since they come with built-in brand recognition. Sadly, most franchisees begin their careers owing a lot of money to their franchiser. Thus, a franchise is not exempt from this rule.
This list is not meant to discourage anyone from becoming a franchisee. In fact, breaking into the world of franchises can be one of the most lucrative decisions you’ll ever make. However, it’s important to understand that it’s not all sunshine and rainbows. Franchises are wonderful, but at the end of the day, they’re still like any other business.