Myth vs. Reality

Myth #1:

You roll the dice when you buy a franchise.
Alternative myth: You can't miss being successful with the right franchise.

The reason most myths become widely accepted in the first place is that there's a kernel of truth in them. Franchising has a reputation that's part shimmering small-business success and part fast-talking huckster. It's earned that dual reputation through 30 years of minting gold-plated McDonald's millionaires and 30 years of franchise failures (accented by the occasional all-American fraud).

The reality lies somewhere in the middle, of course. Any time an investor decides to put money into a new business, there is extraordinary risk. It matters little, despite claims to the contrary by those hyping the growth of the franchising industry, whether the new business is franchised or independent. It's a fact of life that all business endeavors involve risk.

Behind every successful franchise chain is a group of owners working harder than they ever thought they would. Many of them are loving it--and no doubt, some of them are miserable.

Don't buy a franchise expecting your path to be paved with gold. At the same time, don't let a cynical eye steer you away from a terrific investment and development opportunity. The objective is to find a solid franchise program that works well for you, and then use it to build your own success story.

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This article was originally published in the October 1998 print edition of Entrepreneur with the headline: Myth vs. Reality.

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