5 Misconceptions About Owning A Franchise Business

Franchising has become a popular option for many veterans looking to start their own business. However, despite the number of people hopping on the franchise bandwagon – there are several misconceptions about the process.

Franchise Misconception #1: You Are Buying a Franchise

Technically, you’re not actually buying a franchise. What you are doing is investing in a franchise system. This means that you are purchasing the right to use the brand name, support and operating systems. It’s important to review a franchise agreement with your attorney, and make sure you know exactly what you are getting in an agreement.

Franchise Misconception #2: This is a One-Time Investment

Starting a franchise business is just like starting any other business, it does require a substantial investment. Your initial franchise fee is not the only investment you will need to make. Before you make the decision to invest in a franchise business, make sure you are prepared for any unforeseen expenses associated with running a business. This includes your personal income needs.

Franchise Misconception #3: You Will Be Told Exactly What You Can and Cannot Do

Every franchise system is different. In many cases, you do have some “wiggle room” to be a little creative with your business. You’ll still have the power to hire and develop your team, and in many cases you will have the power to make the final decision on which marketing avenues you use. However, keep in mind that the business plan and revenue-generating strategies that are included in your franchise agreement are there because they’ve worked time and time again. Having the plan laid out for you isn’t necessarily a bad thing!

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Franchise Misconception #4: Franchisors Only Care About Your Fees and Not Your Success

This just doesn’t make any sense. Your franchisor is only successful if their franchisees are successful. Your success translates into the overall brand power. If you falter, it can actually damage the brand in the local area. So, remember that your franchisors are there to see you win too!

Franchise Misconception #5: The Only Franchise Opportunities Are in Fast Food and Retail

Businesses in a variety of industries are adopting franchise models these days. While retail and fast food franchises are popular, you can also find opportunities in home care, hospitality, disaster restoration, fitness, and communications. Do your research and see what’s available in your industry of choice.