Planning to venture into the franchising industry? Think twice, thrice, and a lot of times. There are so many beliefs being touted out there that people seem to believe at the onset: franchising is easy profit, franchising is all about having the money, franchising is a sure market. There’s a laundry list of myths surrounding this industry, and it’s dangerously misleading if we cannot set the records straight.
THE MYTH: Franchising is easy profit.
THE REALITY: We need to get this out of the way immediately. This is one of the worst myths out there. In any venture, there is no “easy” profit. Everything is gained through hard work and perseverance.
THE MYTH: If I invest in a well-known franchise, it means I have a high chance of succeeding.
THE REALITY: Businesses, like most things in the world, do not exist in a vacuum. There is endless pushing and pulling from all stakeholders, and each movement has an effect down the line. That said, even the most famous franchise and franchising models suffer through economic breakdown. A company with great branding could only take you so far. It is still up to how it is managed to know if it can withstand the tremor or not.
THE MYTH: Once I have the money to pay the franchising fee, I can put up the business.
THE REALITY: Most franchisors will entice you with low franchising fees, failing to (or omitting in purpose) mention the other factors that you need to invest in. For instance, you must also look into the operating costs: the equipment needed, electricity consumption, wages for employees, security details, the system cost, and other requirements as specified by the franchisor.
THE MYTH: Turnkey franchises are the easiest to operate.
THE REALITY: Most first-time business owners are eager to get “turnkey” franchises. These, as the term states, are businesses wherein all you need to do is “turn the key”. What they fail to realize is that this model is non-existent. You must be willing to work hard and smart every single day to keep the business running. That means getting off the couch and doing actual work in order for you to profit.
THE MYTH: I have to give up a lot of time and money to ensure that the business will continue to run.
THE REALITY: You don’t. Now, this might sound contradictory to the previous entry. However, what matters more is how you manage your time and money. Simply giving up your resources means exactly that—giving up. Allocate properly and you’ll be able to see tangible results in your endeavor.
THE MYTH: Running the business is all up to me. The franchisors have no say anymore since they have transferred the rights to me.
THE REALITY: Despite your dream of becoming your own boss, there are still certain protocols that you need to follow when running a franchise. For instance, the franchisor might decide that they want to roll out a different security feature. You have to abide by the standards of the company. However, if you have some concerns, make sure that you voice them out. There might be issues about that certain security feature that will not be applicable to your location, for example. No company is static, but you have to remember that, in the end, you’re still carrying their brand.
THE MYTH: Marketing expenses will be taken care of by the franchisor. All I have to do is sit and wait for the money to come in.
THE REALITY: To some extent, the head office of the franchise will be handling the marketing expenses. This is especially true when they are rolling out blanket campaigns which would affect the brand state (or nation) wide. They might have some idea of what will work in your location. They may, for example, tell you to do some flyering in your trade area. However, you as the franchisee have better knowledge of the economic and business landscape. You would know for a fact if indeed flyering works or not. If it doesn’t, save some of your marketing funds and tell your franchisor what works better. You may want to engage into local store marketing in order to boost sales.
It’s not an easy road, not by any standard, but we can assure you that the franchising industry is a very challenging one. By dispelling these ways of thinking held by entrepreneurs, we hope to help budding business owners with their own future endeavors.
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