Busting the 5 most common franchising myths
The franchising industry is one of the most robust, bustling, and profitable industries in the UK. With 97% of franchises reporting a profitable operation, it’s clear that both starting a franchise or buying a franchise is a confident step forward for any business.
By this point we would assume that you know the basics of franchising. If you’re not sure what a franchise is, take a look around the QFA website or read our useful guide to What is a Franchise.
So why are so many businesses so reluctant to do just that? One of the largest reasons for doubting the power of being a franchisee is the huge number of myths and misconceptions surrounding franchising. Not only is this harmful to franchises across the UK and indeed around the world, but it’s also holding your business and entrepreneurship back from achieving wider, higher goals.
Here at Quality Franchise Association UK, we’re passionate about dispelling some of the most common myths about franchises and setting the record straight. So let’s dive right in to do just that.
Myth 1: Becoming a franchisee requires previous business experience
Sure, having previous experience running a business will aid your success as a franchisee. After all, there will be many invaluable skills, such as communication, marketing, and managing, that will be transferable in your franchise endeavour.
However, having no previous business experience doesn’t mean you can’t become a franchisee. Running a franchise is more about the concept and systems you’ll be trained to follow, and executing decisions swiftly, decisively, and to the company’s expectations. These are skills that can be learnt from many professions, whether it be teaching, the military, or even working on the shop floor.
Myth 2: Being a franchisee means I’m not really in charge
Potentially the biggest myth around franchising, many people’s concern that being a franchise just hands control over to the central company is mostly unfounded. Being a franchisee does set up a selection of frameworks and systems for your franchise to work within, but it is still you building and developing the business to the best of your ability. You may, of course, need to follow certain safety procedures and systems in order to remain in sync with the rest of the organisation, but in terms of day to day running of the franchise you will have complete control.
You could even have a wider impact on the franchise as a whole, as there is a history of franchisees suggesting new menu items or products that have seen a wider national uptake. By being a franchisee you get to retain all the control you want whilst reaping many benefits.
Myth 3: Investing in a franchise is a passive job
Although investment in a franchise can ultimately lead to you being able to lay back on a beach, sipping on a cocktail as the money rolls in, this is far from the reality at the early stages of a franchise. You’ll need to be willing to work in your business in order to gain a thorough understanding of what is going on, so you can potentially swoop in in the case that your business begins to struggle.
For example, if one of your employees in management were to leave suddenly, somebody would need to step in to resolve the issue. That could often need to be an investor, so understanding the ins and outs of your business’ operations could be key to its survival in case of an emergency.
Myth 4: Franchisors will accept money from anyone
Understandably, a lot of companies can be highly selective in who they choose to allow to invest in the business. Although over half of all franchises report turnovers in excess of £250,000 per year, some franchises can struggle to generate enough revenue to become profitable. In these cases, or in specifically difficult times for the business, investors may need to invest further into the business.
If a franchise hasn’t done its due diligence prior to investment, they could find themselves lacking a reliable source of funding through incredibly difficult times. For this reason, franchisors often do a high level of research to protect franchisees.
Myth 5: Franchise entry cost is expensive
It can be true that franchises can cost a lot of money to enter into, but some can cost as little as less than £5,000. If you’re seeking to get involved in a franchise, you don’t need an unattainable level of funding to do so. You need to remember that you’re not just buying a business but making an investment, and in terms of both money and effort you’ll get out what you put in.
Whilst cheaper franchise entry can be tempting, you’ll need to note that this cheaper entry will come with smaller returns. If you’re seeking a high return then you’ll likely need to invest a little more to improve on your rate of returns.
Franchise owned businesses currently sit at 44,000 units, 97% of whom are seeing profitability and a positive return on investment. If you’re interested in investing in a franchise in one of many profitable industries, take a look around the Quality Franchise Association Members Directory.