Wednesday, September 7, 2022
5 pieces of received wisdom about franchising
Become a franchisee
Franchising has many advantages that can reassure even the most cautious budding entrepreneurs. But it can still frighten off a good many others. Don’t get caught out by these five pieces of received wisdom.
1. I’m not my own boss
As a franchisee, you certainly are your own boss, and you still get to make the decisions. The brand may point you in the right direction and advise you on a number of aspects, and that’s one of the advantages of doing business as a franchise. But always remember that you will be investing to create your own company, and you’ll have full freedom in many areas: setting your retail prices, deciding on who to hire, how you manage the place, your choice of premises, etc.
2. There’s no way I can fail in a franchise
This is the trap you absolutely must avoid! Franchising certainly offers a reassuring framework and allows the entrepreneur to get things done more quickly, while it gives potential business owners a chance to create something in a totally unknown sector. On paper, if you apply all the franchisor’s recommendations to the letter, you ought to get the same results and your enterprise will work for you. But in practice, the reality on the ground can be totally different. Your future success will depend on the area you set up in and, if your concept so requires, your choice of premises. The commitment you put into your point of sale will also have an impact.
3. Running a franchise business is more expensive
This is true: being a franchisee costs more than if you decide to set up on your own. But in return for this investment, you benefit from services and support that you don’t get if you run a business that isn’t under a household brand name. And, as in any business project, the main thing is to compare this investment with the potential turnover you could make.
4. The bigger the network, the more serious they are
Here too, beware of the trap! Size doesn’t always matter. Naturally, your duty as a future entrepreneur will be to compare the brands that you are interested in . But don’t focus solely on the make-up of the network, even if it’s reassuring to see touchpoints all over the country. Also, don’t take it for granted that a good concept means that the franchisor is a good one, or a serious one. There is no connection between the two. The most important thing here is to analyse the documents and data provided by the brand.
5. I’m not allowed to leave once I’m in
It is true, of course, that when you sign a franchise agreement, you have an obligation over a set period of time, often depending on the amount invested. If you want to leave the network before your time is up, it will be possible, but under certain conditions. Make sure you carefully read and fully understand any clauses that might prevent you from terminating the contract before the end of your franchise period, and starting a business in a similar field once you’ve left.