Franchising is a good business expansion strategy because it allows entrepreneurs having capital limitations to expand their businesses. People are always looking for opportunities to invest in successful companies; that is where franchising comes in. A franchise business model typically involves the business owner (franchisor) and the investor (franchisee).
Franchising can be profitable, but it’s associated with risks and challenges, like all other businesses. Some problems (challenges) of franchising result from ignorance, and that’s why it’s essential to consult a top franchise litigation lawyer or master franchise attorney in the USA if you’re considering franchising.
Common Franchising Myths
The basic knowledge of franchising people ranges from half-truths to myths and outright misconceptions. Specifically, franchise myths are rife, and it’s essential to identify and debunk such myths, such as:
Myth #1 Location and success go hand in hand
A good location is undoubtedly pertinent to the success of a business because you can’t sell where there are no customers. Unfortunately, good business locations come at a price and can be unaffordable when you’re starting. However, the success of a business isn’t tied to the site.
A hardworking entrepreneur can establish a franchise anywhere and grow it into a thriving business. The truth is that top-ranked franchisees do not always operate in great locations. A recent study showed that most successful franchise businesses were acquired from struggling franchisees and transformed into successful businesses.
Myth #2: Successful franchisees are workaholics
Most people think that a franchisee must be a workaholic to achieve success. However, hard work is just a prerequisite for success but not the secret to succeeding. Struggling franchisees put in the hours and work hard but have no tangible results for their labor. Top-rated franchisees work smart besides working hard– that’s what makes them successful and sets them apart. The following points can help transform a struggling franchise into a successful business:
· Finding a balance between running and growing their businesses;
· Investing in human capital development and growth;
· Systems automation;
· Training employees that being busy doesn’t translate to productivity or efficiency;
· Working with the big picture in mind;
Myth #3: The level of education determines success
Of course, schooling teaches you how to run a business, but it doesn’t mean that you must be highly educated to succeed as a franchisee. Many franchisees have degrees, others do not have degrees, while others didn’t even go to college.
Myth #4: Experience is needed to succeed in franchising
Although experience can help your business grow and thrive, that’s not always the case. The success of a business depends on many other factors as well.
