12 Myths Uncovered About A Franchise Opportunity
What You Need To Know About Investing In A Franchise
Launching any new business can be rather daunting, even something a turn key as a franchise opportunity. However, even with franchise opportunities, there are some misconceptions that have taken on a life of their own, and become ill-informed truths. We have put together a list of the twelve biggest myth about a franchise opportunity, so you can launch your own operation with a clearer mind.
1. You Need To Understand The Business Before You Start
This is the first myth we need to bust about a franchise opportunity. If people understood everything about running a business, either everyone or no one would own a franchise. As with everything new, there is a learning curve. If there weren’t, there would be no challenge, and business, as we know it, would simply dissolve. When it comes to a franchise opportunity, the parent company will provide the tools and training, and you will find many “a-ha” moments as you go along. Not all situations can be accounted for and put into a manual.
2. A Franchise Opportunity Costs A Lot Of Money
The truth is that there are franchise opportunities available for any budget. Yes, there are some franchises that can cost hundreds of thousands of dollar, and into the millions, depending on the type and location. Franchise hotels, for instance, have a very high entry investment. On the other end of the scale, there are number of franchise opportunities that only have an initial investment of a few thousand dollars, such as franchise travel agencies.
3. You Need To Buy Property For Your Franchise
Perhaps one of the biggest misconceptions about franchise opportunities is that they require their own building. In some cases, as with fast food franchises, franchise owners are expected to purchase property, and even finance any construction to meet the franchisor’s specifications. However, there are many franchise opportunities which can be run right from home, such as tax preparation, accounting, travel, IT support, and more.
4. You Will Have To Quit Your Current Job
This is patently untrue. While some people are ready to take the “big leap” into entrepreneurship with a franchise opportunity, many are using their franchises to see if they want to transition away from their current careers. Many franchise opportunities allow owners to put in part-time hours, while still earning a healthy supplemental income.
5. Only A Nationally Recognized Brand Can Be Successful
McDonald’s may be the “ambassador to the world,” but that does not automatically mean all other food-oriented franchise opportunities are complete failures. In a similar vein, the success of a franchise does not survive on brand name alone. Quite the opposite. It’s how franchise owners operate their own businesses that reflect upon the brand. It is better to focus on competition in a given area and figure out which niches are untapped in your area, before picking a franchise.
6. Buying Into A Franchise Opportunity Guarantees Success
No. Franchises, like any other business opportunity, require work. Owning a franchise means you are just that – an owner. Yes, there are franchises which allow owners to take a more hands-off approach than others, but as an entrepreneur who has entered a legally binding agreement with the franchisor, there are requirements and expectations you need to uphold. This does not mean you have to micromanage every single aspect of your franchise, but you do have to be involved with your franchise for it to be a true success.
7. Because A Market Is Untapped, You Are Sitting On a Goldmine
It always pays to do a bit of market research before opening a franchise. To use an abstract example, Savannah, Georgia does not have many businesses specializing in firewood. For a novice, logic would dictate that opening a franchise specializing in selling firewood by the cord would bring in revenue hand over fist. However, Savannah, Georgia is a very warm and humid city. If the temperature didn’t keep customers away, then the humidity would prevent them from using the firewood properly. There is a line between untapped markets, and non-existent markets. Before jumping on a seemingly lucrative franchise opportunity, check to see if the market exists for what you want to sell.
8. Food Franchises Are The Safest Bets
The justification for investing in food franchises is something along the lines of “everyone has to eat.” Because of this, many people view food franchises as being a “recession proof business.” While everyone does, in fact, need to eat, the competition among food franchises is incredibly high, and has been for decades. Also, during an economic downturn, people are more likely to prepare meals at home than eat out at franchise restaurants, no matter how inexpensive or happy the meals are.
9. Franchises Kill Creativity
Quite the opposite. Yes, there are certain requirements of franchises, such as uniforms and signage. Those requirements are in place as part of branding and marketing. However, outside of those requirements, franchisors encourage suggestions, in part because they like to nurture creativity among franchise owners, and also because suggestions may lead to more profits for everyone involved. For example, people get extremely excited about McDonald’s breakfast menu. The Egg McMuffin is perhaps one of their biggest sellers. The truth is that McDonald’s didn’t always sell breakfast, and the McMuffin was created as a suggestion from one of their franchisees.
10. The Franchisor Will Practically Guarantee Success
Wrong. There are a number of systems a franchisor will provide, such as branding, marketing (to a degree), proprietary technology, and even some support. However, every franchise is still a business, and there are certain things you have to bring from within yourself. Qualities such as ethics, employee mediation, basic business skills, and even rudimentary motivation cannot be provided by the franchisor. In order to make the most of any franchise opportunity, you need to have the aforementioned qualities, and even some intangible traits that make for a good business leader.
11. Only True Entrepreneurs Run Successful Franchises
Let’s go with the “classic” franchise example of McDonald’s, one more time. Ray Kroc built the McDonald’s empire. He did not start as a franchisee and work his way up the chain. He was a franchisor and an entrepreneur. If you are a franchisee working under a corporate brand, you are not an entrepreneur. That’s the hard truth. That being said, owning a franchise does not mean you cannot achieve financial independence. In fact, many franchisees cut their teeth on franchise operations, and get a taste for what it would be like to start their own businesses. Eventually, they put aside enough earnings to exit the franchise and launch their own independent businesses.
12. It’s Best To Invest In Growing Franchise Opportunities
Franchise opportunities are very much like the stock market. One day, a franchise will be very popular and it will see huge amounts of growth. Then suddenly, the public will forget about it, and business will drop off or normalize. If you are considering investing in a franchise, it is best to weigh a number of factors, such as your budget, what your location needs or wants, and what has lasting potential. Do not fall for what is “hot” right now, because that may not be the case once you are up and running.
Now that we have put a number of myths to bed, regarding franchise opportunities, you can approach the business model with a clearer mind. The Commercial Capital Training Group (CCTG) offers all of the benefits of a franchise, with a number of big exceptions. First, CCTG provides a truly recession-proof model, because we train our graduates to launch their own businesses in the world of commercial finance. Second, your business is wholly yours. Your name, your logo and your philosophy. You are your own boss, and get the final say in how the company is run. You get to set your own hours, and decide the direction your business will take. Third, we provide everything you need.
We will provide the training, tools, and 24/7 support. We will handle and tailor the branding and marketing for your business so you can be as successful as possible. In many ways, CCTG is like a franchise, but your victories are your own. There is no corporate line to toe, and success is not owed to some faceless corporate entity. When you make money, it is yours. If you like the idea of true entrepreneurship, combined with all of the tools and safety systems of a franchise, then you should contact the Commercial Capital Training Group. We take people who want to achieve financial independence and give them the training they need to make their dreams a reality, and enjoy the satisfaction of true success.