Franchising Myths

Franchising is a great way to be in business for yourself with lower risks than a traditional start-up. There are lots of books and internet sites that people can use to educate themselves; so much information, in fact, that it can be overwhelming. How do you sort fact from fiction? Here are some common myths about franchising.

Myth - All franchisees are successful
Fact - Success is never guaranteed. Franchisees do enjoy a better chance of success than other start-ups, but you still have to work hard and follow the processes taught by the franchisors.

Myth - A high cost franchise will give higher returns
Fact - A high cost franchise does not guarantee higher returns, and over time you might make less money with a high cost franchise versus a low cost one. The important thing is to find a franchise that fits your requirements (financial and otherwise) to ensure a higher likelihood of success.

Myth - You don't need help from a lawyer to buy a franchise
Fact - The FDD and Franchise Agreement are legal documents. It is important to have a lawyer review all legal documents before you sign. Your lawyer should have a background in franchising to make sure you are getting the best advice possible.

Myth - After buying your franchise, you are the boss
Fact - Yes, it is your business. However, your franchise is part of a system with established processes. The franchisor can legally require you to order supplies for a certain vendor, have your business open certain hours, get their approval for marketing campaigns, etc. Read the FDD/Franchise Agreement to know what you can and can't control.