There are a lot of myths and misconceptions about business ownership and probably more still about franchising. This week, we’ll look specifically at the myths related to the kinds of franchises available and what makes a “good” franchise.
MYTH: : Franchising isn’t for me because I am not interested in food or automotive franchises
FACT: There are franchises in most industries you can think of from clothing to cosmetics, senior care, printing, educational services, taxservices, fitness, florists, consulting, advertising, personnel, residential cleaning, packaging, pet services, sign products, computer services, hair salons, dry cleaning…and the list goes on. If you were going to make a decision as to what business to go into based on the product alone, you would certainly be able to find something that was of interest to you. More importantly though is what your role as an owner will be.
MYTH: : Franchising isn’t for me becauseI don’t want to work 24/7
FACT: Most people don’t! And the fact is that most franchises don’t require it. In fact, there are many Monday-Friday 8-5 type opportunities in B2B realm, providing needed services to business consumers. Even in the start-upphase of a franchise, it is NOTthe grueling 80-100 hour weeks you hear entrepreneurs complain of since the systems are already in place for you and the owner is not required to innovate systems in areas they are not experts in. I’m not promising you a 40 hour work week either in those start-up days…but when did you get that promise in the corporate world? And after the business is up and running, it frequently IS possible to put a manager in place and spend less time in the business.
MYTH: : Franchising isn’t for me because I can’t replace my big corporate income without having a lot of employees –and I don’t want a lot of employees!
FACT: Managing a lot of employees is not required to make a lot of money. Managing a lot of employees –or not–is simply one of the choices you have in evaluating what franchise might be right for you. For some people, having a lot of employees is how they measure their success and they enjoy having the complexities of a large business. For others, if they could make the same amount of money with 2 or 3 employees they would be happy. Fortunately there are options like that available.
OK…so you’ve decided franchising actually might be a good way to help you achieve your goals. There are still some myths and misperceptions that can ambush you as you look at whichfranchise represents a good opportunity for you.
MYTH:The market is already saturated–there’s a business like that on every corner
FACT: If there’s one on every street corner, there’s both demand and profitability. So if you invest in a franchise that competes with all the independents that are “saturating” the market, do you think you can compete effectively given the
sophistication of a franchisor’s expertise compared with the mom and pops relative lack of resources and sophistication? Look at where you got a massage 20 years ago (if you got one at all)…it was a high end spa or resort. But now Massage Envy is everywhere and there are all kinds of other franchises in the market as well that are taking vast market share away from all the independents. Finding an industry that is still dominated by the independents –even if you perceive it to be saturated by them –may represent a great opportunity.
MYTH: The best way to make money is tobe in a “hot” industry
FACT: The problem with looking at what’s hot today means that by definition at some point in the future, something else will be “hot” and today’s opportunity may no longer fit that bill. We’re looking at investing in a business here –not day trading! So finding a good solid business with consistent demand may actually represent a far greater opportunity than that “hot” new kids play place.
MYTH: Franchising is only good if you can have a big name brand
FACT: Obviously with thebig brand name you get customers to come to you based on that name recognition, you have a long track record of proven success, strong support by the franchisor anda consistent message of what the best practices are. And there certainly aregood opportunities in those big brands out there. However, there is another consideration here which is to look at the potential for growth. By the time a franchise has become a name brand, the opportunity for growth can be very limited. It can be difficult to finda (good) location and territory encroachment can be a real problem as more and more of the same brand squeeze into the marketplace. So buying that big name brand can, in some cases, also be like buying tech stocks in 1999.For my money, I’d much rather look at the strength of the franchisor’s training and support and their ability to grow market share rather than whether they already have the market share.
One of the important things to remember in investigating franchise opportunities is to distinguishfacts from fiction and also to distinguish facts from what may be misperceptions.