Franchising myths can originate from a variety of places: your neighbours, the small business owners in your area, or your friends. For demonstration purposes, we will make this myth propagator a friend of yours. This friend is quick to offer negative advice as you are ready to take control of your financial future and on your way to self-discovery. “Well, my friend said…” is a common refrain we hear in the franchising business. In this blog entry, we take a look at five myths that we commonly come across as one of the best franchise consultants Canada has to offer. Here, we will debunk these same myths with facts.
Myth One: Only in industries with little to no competition, can successful businesses emerge If you believe this is true, then you risk missing opportunity. Proven systems and processes are what drives success with franchising, not lack of competition. Back when you could buy a hamburger at every street corner, McDonald’s was still able to flourish. However, their strong understanding that the creation of consolidated systems and efforts could promote success is what helped them accomplish their dominance. The lack of competition does not drive profitability; instead, it drives lack of opportunity!.
Myth Two: The cost of Franchising is too much Of all myths we hear, this may just be the most common one. According to multiple studies, many business seekers tend to guess what the cost of a franchise should be and often time they are nowhere near accurate. In the studies, many participants believed that the cost of owning a franchise would be between half a million and a million dollars. However, this is far from accurate. One of three franchise opportunities will cost under $100,000 according to a study completed in 2010 by franchise consultants. The next third of franchise systems have investment levels between $100,000 and $250,000 so franchising is much more affordable than most people originally believe. Canada’ potential franchise owners only need to have about 50% percent of the initial investment in the form of liquid capital. The rest can be financed provided that you have good credit history; most common forms of financing are home equity lines of credit and the Canada Small Business Loans Program.. Few business seekers are aware of these benefits.
Myth Three: A high level of investment is required for a high return on investment Everyone has heard of the saying “it takes money to make money”. However, this does not correlate with franchising. The potential return on investment is not necessarily reliant on the cost of a particular franchise. Due to a lack of overhead, several of the Service Sector businesses routinely yield higher returns with far less initial investment. In essence, you want to find a franchise that is an optimal fit, because profitability and level of return is a direct byproduct of how well the business is run. This is done by choosing a franchise concept that is well-matched to your depth of experience, passion for types of work, and skill level. Franchise consultants in Canada can help you find the perfect franchising opportunity.
Myth Four: The quality of the product is what determines whether a franchise succeeds or not. This myth is easily disproven. Going back to the McDonald’s example, how would you compare a McDonald’s Big Mac to the freshly pressed hamburger patty you cook on your backyard charcoal grill? It probably does not compare to the delicious burgers you make. However, on any given day, McDonald’s sells more hamburgers than you will ever eat in your life. Top-rated franchise concepts build their success on several elements: consistent customer experience, proven systems and processes, strong branding, great communication and coaching of their franchisees. partnering with a w good franchise system that is able to demonstrate “system competency” will enable you flourish in the business world, these are all specifically designed to deliver a consistent level of success, provided that your skills, experience and interests are well matched to the roles that are required to drive success for the business you are considering.
Myth Five: The only options available to franchisees are retail and fast food opportunities. Now that we have used the fast-food giant McDonald’s as an example, we are going to make it clear that fast-food and retail franchises are not all that is out there. On the market today, there are more than 1000 different franchise concepts available. If this myth were true, there would be a nauseating level of fast-food outlets in every community across Canada! Home improvement, health and wellness, cleaning, education, IT services, real estate, pet care, and more are among the over 80 different industries that have franchise opportunities. Finding the right fit is key. Fortunately, with the diversity of fields available, there is likely a right fit available for those seeking self-employment in franchising. It is important to keep in mind that you past industry experience may not end up having anything to do with your best franchise fit, so the best practice is to first identify what “transferable skills” you have, that can be leveraged in other industries. Now that we have helped you dispel a few franchise myths you may have encountered, you may interested in becoming a franchise business owner. You are not alone In North America, – 70% of high school students want to start a business, 55% of the general population want to be their own boss and one out of every 25 adults is currently starting a business… Franchising has historically proven to be far less risky than starting a business from scratch! With the help of franchise consultants, Canada’s potential franchise owners can get advice on choosing the right franchise opportunity. Think of it this way – you wouldn’t buy a house without the experience of a real estate professional, so why would you want to buy a business without the experience of a franchise professional? In essence, there has never been a better time to be a franchisee. Gary Prenevost is one of Canada’s leading franchise experts and has been an entrepreneur for more than a quarter century. He has been involved in a variety of successful non-franchised and franchised self-employed businesses. By exploring the ideal solutions that fit an individual’s desires and strengths, Gary helps senior and mid-level executives take a step back and objectively look at whether franchise ownership would be a viable and positive career choice. By playing to the individual’s passions, the franchise owner can enjoy less stress, greater success, more fun, and improved quality of life.