On today’s Franvesting podcast, David Stein will debunk some of the common myths about buying into a franchise.
1) Franchising is just too expensive.
The barrier to entry will vary based on the type of franchise you get into. There are thousands of different franchises that you can invest in, in multiple different categories. You need to explore them for your particular investment level and passion for work.
The beauty of a franchise system is the access to a variety of support, that you would normally need to supplement with high salaried employees if you started a business from scratch.
2) The corporate franchisor is going to control my franchise.
There will be some corporate control, but the day-to-day control at the local level is your business, and it’s up to you to align your goals with theirs. It’s a true partnership.
3) Owning a franchise me ans no creativity.
There is alot of room for creativity within the structure of the franchise. This type of creativity is critical to the level of your success. Furthermore, the franchisor will expect you to be creative with the management of your business and local marketing.
4) I’m absolutely going to succeed.
Common sense will tell you small businesses do fail, and there is no guarantee of success. Data shows that franchisees have a higher level of success then starting a business from scratch. If you follow a franchise system, you will have a better chance of success.
5) You need to be an expert in the field.
Absolutely not! Some franchisors do require some type of background and skills. Most franchisors, when looking for the right franchisees, are looking for soft skills – management styles, problem solving and passionate about working hard. Essentially, an alignment of your values with theirs.
BONUS Question from the FranBox Mailbox
What is Item 19 in the Franchise Disclosure Document (FDD)? Why is this important?
Send your questions for the FranBox Mailbox.
David Stein – Franchise Investing Insider
Laurean Callander – FranVesting Producer