When it comes to starting your own business, investing in a franchise can be a great first step. Unfortunately, there’s a lot of misinformation in regards to owning franchises. We’re going to discuss six of the most common myths below and set them straight so that you have a better understanding of what it’s like to own a franchise.
1- Franchises Are For Rich People
Probably one of the biggest misconceptions about franchises is that they’re only for rich people. That couldn’t be further from the truth. There are a ton of different franchises out there that require a wide range of startup costs. In most cases, the franchise that you choose can help you to be directly connected with lenders who can aid in getting you the funding you need to open your new franchise.
2- You Need Industry Experience
When you first start looking over franchises, you may feel compelled to skip over ones that are in areas where you don’t have any industry experience. Just because you don’t have experience in a specific industry, that doesn’t mean that you can’t have a successful franchise in it. Remember that franchises will provide you with quality training so that you and your staff can better understand the industry. Thanks to the franchise business model, you can learn as you go and still be successful.
3- You Won’t Own Your Franchise
Another common myth about franchises is that you won’t actually own the one that you operate. This is not true at all. You legally own the franchise even though you’re required to operate under the outlines of your contractual agreement with the franchisor.
4- It’s the Franchisor’s Job to Bring in Customers
Another commonly misunderstood problem when it comes to franchises is that the franchisee believes that the franchisor is responsible for bringing them customers. While it’s true that there is a lot of cross-marketing between the franchisor and other franchises throughout the country, you’re ultimately responsible for bringing in new customers. Your franchisor will usually provide you with adequate marketing material and strategies that will help you learn how to bring in new customers to your business.
5- Franchisors Steal Profits From Franchises
One very common misconception about franchisers is that they steal the profits from their various franchises. It is important to know that most franchises are required to pay the franchisor between 4 and 12% of their gross annual sales. However, keep in mind that the royalties that the franchisor makes off of its franchises are directly tied to the success of the franchises. Franchisors aren’t trying to steal money. Rather, they continually work to provide their franchises with ongoing support and guidance to make them more successful so that everybody wins.
6- Franchises Are For Wanna-Be Entrepreneurs
One of the most common myths that people have made about franchises is that they’re for people who want to be entrepreneurs but can’t start their own businesses. A franchise is a business. It requires you to have the same skill set and dedication that any new business owner who doesn’t opt to go with a franchise business would need. The best part is that with a franchise, you have a proven business model that you can follow in order to gain quick success instead of just guessing when starting a different type of business. If you are purchasing a franchise in the United Kingdom for example this model often includes guidance on important details like obtaining a UK VAT number, which is crucial for tax compliance and legitimate operations.
