By Wayne Maillet
Franchising is a model for business growth that has been around for more than a century and has generated employment, stimulated economies and contributed to the financial success of millions of people around the world. It has made it easier for anyone with a strong desire to get into business for themselves, but not by themselves. Indeed, every year, many individuals decide to improve their lives by becoming franchisees.
Despite the success of this business model, however, there are still misconceptions and a lack of knowledge about franchising. Many people avoid franchising as a result of their misunderstandings, while others buy a franchise for the wrong reasons. In both cases, they need to be in a better position to make an informed decision as to whether or not franchising is right for them.
The following are some of the most common misconceptions about franchising.
“Franchising is too expensive.”
Many people have heard of franchises that require an investment of millions of dollars. These can include retail and food-service franchises that require costly equipment, furniture and leasehold improvements. There are other franchises, however, available in almost any industry, many of which carry lower costs. A home-based franchise, for example, can cost as little as $10,000. There are opportunities to fit every budget, allowing each franchisee to achieve personal satisfaction based on his/her needs and financial constraints.
“Franchising does not allow creativity.”
Entrepreneurs often avoid buying franchises because they worry their creativity would be hindered by the franchisor imposing too many restrictions on the business and forcing complete compliance with the franchise system. In some cases, this is a legitimate concern that does require consideration. Most franchise systems, however, do allow franchisees to adapt concepts to their market, particularly since local creativity can benefit the system as a whole.
McDonald’s, for example, is known for its consistency, but has also allowed its franchisees to be entrepreneurial by creating new products over the years, such as the Egg McMuffin. By allowing controlled variations of a system, franchisors can help ensure their brands evolve and develop further.
Indeed, one of the benefits of franchising is the ability to combine the experiences of various franchisees to make improvements to the system that will benefit everyone. The degree of creativity permitted will vary from system to system, but many new, emerging franchisors allow the most innovation from their franchisees. Before becoming a franchisee, it is important to research each system to confirm what is possible within its framework.