Franchising a business can be an incredibly rewarding and lucrative opportunity, but it’s not right for everyone. Unfortunately, many business owners don’t understand what they’re getting themselves into when they decide to franchise their company. Other entrepreneurs may not realize what a great opportunity they are missing out by not franchising. These decisions are often based on people’s misconceptions about franchising.
It’s time to set the record straight. Here’s the truth behind some of the most common franchising myths:
Myth: Businesses That Require Licenses Cannot Be Franchised
Many businesses require special licenses or certifications in order to operate. If you own this type of business, you may be under the impression that franchising is not an option. But, that’s not the case. However, the person who buys into the franchise business must either have the license or certification or partner with someone who does.
Myth: Only Fast Food and Retail Businesses Can Be Franchised
Small business owners often make the mistake of thinking their business cannot be franchised because it is not within the fast food or retail industries. But, this belief is based on a myth. There are plenty of businesses outside of these industries that are franchised. In fact, some of the top franchises included on Entrepreneur Magazine’s annual list are within the fitness, communications, hospitality, and auto services industries.
Myth: I Can’t Franchise My Business Because It’s Not Well-Known
Some small business owners believe that they cannot franchise their business because it is not a household name, but this is yet another myth. You don’t have to be a well-known brand in order to find success with franchising. As a matter of fact, franchising is one way that you can become a well-known brand by expanding geographically and reaching new customers.
Myth: You Will Lose Control Over Your Brand
You’ve worked hard to build a brand, so the thought of letting someone be the face of your company in another location may be nerve-wracking. But, you shouldn’t worry about losing control over your brand because of franchising. As the franchisor, you retain a lot more control than you may expect. Franchisors provide franchisees with guidelines that must be followed at all times. These guidelines can cover a wide range of topics, including how to market the business, what to charge customers, and how the inside of the store should look. Therefore, franchisors do still have a say in how franchises are operated even though they are not fully in control of the business.
Myth: You Should Franchise Your Business Anywhere and Everywhere
Expanding to as many locations as possible may be a good decision for some businesses, but it won’t work out for everyone. You should take the time to identify which markets your business would succeed in by researching the consumers and competitors in targeted areas. Then, focus on finding franchisees in these areas. Don’t let a franchisee open a business in a market that you know will not respond well to your business. This is setting up the franchisee for failure, and it doesn’t reflect well on your company, either.
Now that you know the truth behind these common myths, you have the information you need to decide whether you are ready to franchise your business.