The Top 5 Myths About Franchise Ownership

Over the past 20 years, I've had the privilege of guiding 1,000+ corporate executives through the sometimes mystifying landscape of franchising. It's a vibrant, rewarding sector filled with opportunity, but it's also one often misunderstood.?

Let's face it, there's a lot of noise out there, and sometimes, it's tough to separate the myths from the realities.

That's where this article comes in. I've heard all the doubts, all the hesitations, and I get it - stepping into the unknown can be daunting. But I've also seen the other side - the success stories, the life-changing career shifts that all started with a simple leap of faith.

So, consider this article as a friendly chat over a cup of coffee, a chance for me to share with you what I've learned over the years. We'll talk about the top five myths about franchising - those pesky misconceptions that might be holding you back - and then, we'll shine a light on the truth behind each one.

Franchising isn't for everyone, but it might just be for you. Let's pull back the curtain together and find out.?

Are you ready?

Myth 1: Franchises Are All About Fast Food and Restaurants

The first prevalent myth is that all franchises are about fast food and restaurants. This perception is far from the truth. While it's undeniable that fast food chains and restaurants represent a significant segment of the franchise world, they are not the only players.

Franchising spans across various industries, including home services, health and wellness, automotive services, educational services, and more. There are franchise opportunities available in virtually every sector of the economy - more than 4,000(!) different types, to be exact. So, if you're not interested in the food industry, there are countless other options available.

Myth 2: Opening a Franchise Requires Millions of Dollars

Another widely held misconception is that starting a franchise requires millions of dollars. While it's true that some standalone fast-food restaurants or big-name franchises might require a substantial capital investment, many franchise opportunities require far less.

Service brand businesses, for instance, can start as low as $50,000 to $100,000. It's essential to explore the wide variety of franchises available to find one that suits your budget and aligns with your entrepreneurial aspirations.

Myth 3: Owning a Franchise Means Quitting Your Day Job

The belief that owning a franchise means quitting your day job isn't always accurate. While some franchise models require full-time commitment, others accommodate semi-passive or semi-absentee ownership.

In such models, the franchisor takes an active role for a fee, allowing the franchisee to treat the franchise more as an investment. The franchisee can dedicate a few hours a week or a month, managing the business without necessarily quitting their day job. So, it's possible to transition into franchise ownership gradually and manage it alongside your regular employment.

Myth 4: As a Franchisee, You Don’t Own the Business and Lack Autonomy

This perception is far from the truth. As a franchisee, you indeed own the business. You set up your legal entity, be it an LLC, S corporation, or C corporation, and operate under the franchise brand.

You have the final say on essential decisions like the location of the business and the hiring of employees. While you're expected to follow the franchise model, there is considerable autonomy in how you run the business.

Even the royalty you pay to the franchisor is not a loss of ownership, but rather an exchange for support and services that would otherwise cost more if handled independently. It's important to note that you are buying into a proven business model and not giving up a percentage of ownership.

Myth 5: It Takes Years to Open a Franchise and Start Making Money

The final myth we'll debunk is that it takes years to open a franchise and start turning a profit. While a brick-and-mortar business might take longer to set up and become profitable, many franchises can be up and running much faster.

Service-based franchises, for example, can start operations in as little as 30 to 60 days from signing the franchise agreement. Moreover, profitability varies from one franchise to another and can be influenced by factors such as the business model, industry, and market dynamics.

Franchises with a lean business model and a small staff can become cash flow positive more quickly, especially when they avoid the costs associated with traditional brick-and-mortar locations.

Seeing Franchising for What it Truly Is: An Empowering Business Model

Franchising is a powerful business model that offers myriad opportunities for aspiring entrepreneurs. It provides the advantage of a proven system, ongoing support, and brand recognition, which are invaluable when starting a new business. However, the cloud of misconceptions surrounding franchising often obscures these benefits.

By debunking these myths, I hope to shed light on the realities of franchising and encourage more entrepreneurs to explore this dynamic business model. Remember, the key to success in franchising, as with any business, lies in thorough research, diligent planning, and dedicated execution.

If you’d like to learn more about how the process works, grab a free digital copy of my book, “Franchise Freedom,” listen to my podcast of the same name or book a no obligation “right fit” call with me via my website.

I’d be honored to help you start the journey!