The 4 Biggest Myths About Franchising
One of these myths may be preventing you from entering the franchise world.
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Several favorable factors have led to increased interest and awareness of franchising your way to owning a business of your own. The pandemic, now in its third calendar year, provided a situational opportunity for self-evaluation on a massive scale. This in turn led to the Great Resignation, which now includes some 40 million Americans. And we're in the midst of an economy that not only continues to recover, but routinely beats expectations as the data is revealed. Under these conditions, the franchising industry is increasingly beset by many first-timers, who are just beginning to learn about its key value propositions. There's a lot to know about franchising, but sometimes just getting past the common misperceptions that plague the industry can be a repetitive process.
You may have heard of these common examples before. If so, it definitely proves a point. Let's move past these four myths about franchising once and for all.
1. Franchising … you mean like McDonald's?
Because McDonald's is globally recognized as one of the world's leading quick-service food brands and the proliferation of its iconic storefronts, people have learned to equate the concept of franchising with the Golden Arches. While it's true that McDonald's proven business model has led to its success, it's certainly not the only franchise on the market. Far from it.
In fact, franchises span more than 75 other categories, sectors and industries. Yes, McDonald's is a wildly popular and profitable franchise. No, it's not the only franchise you can own and operate.
Related: Considering franchise ownership? Get started now and take this quiz to find your personalized list of franchises that match your lifestyle, interests and budget.
2. You need prior industry experience to run a franchise
If you needed prior industry experience to run a franchise, that would mean only accountants would investigate the H&R Block concept. Does this sound right? Over 40 million Americans have quit their job in the past year and it's not because they want to do something similar. It's because they aspire to something different, appealing and inspiring when it comes to making a living. The key value proposition is that all franchises — regardless of their industry, brand or size — rely on their owners following a proven business model for success. Franchises are designed to be run by entrepreneurs, not industry specialists. You just need a combination of drive, desire and the motivation to work hard and succeed. Franchise concepts can be found for the narrowest of niche markets. But just because you open a mobile pet grooming service, it doesn't mean you'll be operating the clippers. You hire experienced staffers to oversee that.
3. "They're too expensive and I don't have any capital."
Here's another franchising myth that needs to come to an abrupt end. There are thousands and thousands of franchise concepts on the market, crisscrossing all types of industries, sectors and categories. And just as varied as these choices are the attached price tags to own and operate a unit of your own. While many people have the mistaken belief that franchises are all expensive propositions, the truth is the exact opposite. It's even possible to buy a franchise for as little as $2,000. It won't get you all the brand recognition and awareness of a leading franchise brand, but remember that they all have one thing in common: a proven business model.
Just how many franchises are in the affordable for anyone range? There are 25 top-ranked franchises on the 2022 Entrepreneur Franchise 500 list that cost less than $25k. And if you don't have a nest egg or a princely sum willed to you from a distant relative, you can still get access to the capital you need to buy a franchise. Just Google "franchise funding" and tell us when you run out of links to click. We'll still be here.
Related: 5 Ways to Finance a Franchise
4. A franchise will run itself and you'll get rich quick
While these two myths should forever be tossed into the dustbin of history, it is conceivable that one or both could eventually come true. But the franchising industry hasn't come this far and become this popular to perpetuate stereotypical false promises.
There are currently 75 million franchises that employ more than eight million people and are responsible for generating $670 billion in revenue a year. Does this sound like an industry in need of an embellished sales pitch? No, franchises do not "run themselves," even under semi-absentee ownership arrangements. Like anything else worthwhile in life, it takes effort, drive and determination to achieve success as a small business owner. And while you might get rich quick, it's best to plan for steady and scalable growth that builds wealth and worth over time. It may sound like the old-fashioned way to earn a living, but those who maintain their entrepreneurial mindset appear to be doing just fine.
Related: 5 Myths About Successful Franchisees