5 Common Franchise Myths Busted
Franchising is becoming increasingly popular in a wide range of industries. It can be a great way to establish and grow a business quickly and efficiently while being a great vehicle for many to reach their professional and financial goals. Despite the growing popularity of franchise ownership, there are still some misconceptions about how it works. If you have ever considered buying a franchise, it's important to understand the truth behind these common myths.
MYTH #1. You need experience in the industry to own a franchise
One of the most common myths about franchising is that you need to have experience in the industry to be a successful franchise owner. While it's true that some knowledge or experience can be helpful, it's not always necessary. And the reverse is also true: just having a background in the industry does not necessarily qualify you to own a franchise. Franchise businesses are designed to be run by entrepreneurs, not only industry specialists.
Although prior business experience and industry knowledge is a plus, there are "soft skills" that can matter much more. For example, good communication skills, leadership experience, and the ability to work independently are all essential qualities for franchise owners. The franchisor will typically provide training and support in any "hard skills" you need to run your franchise business.
MYTH #2. The only franchising opportunities are in fast-food
For most people, fast food chains are often the first thing that comes to mind when talking about franchises. While it is true that fast food did dominate the franchise market at one time, today there are franchise opportunities in almost every industry. According to the U.S. Census Bureau report on franchising, nearly 300 industries offer franchise opportunities. With so many options to choose from, there really are opportunities out there for just about everyone.
For example, franchises in the home services category are often overlooked. Americans spend more than $400 billion a year on residential renovations and repairs alone, making home services one of the fastest-growing and most in-demand sectors of the economy. In fact, franchises that specialize in both interior and exterior improvements and services are expected to see continued growth for the foreseeable future.
MYTH #3. Franchising is too expensive
The cost of owning a franchise can vary widely, depending on the brand and the type of business. For example, fast food franchises can cost $100,000, while some luxury hotel franchises can cost over $1 million. This may give many people the impression that all franchises are too expensive.
But, just as there are franchises available across a wide variety of industries, there are also franchises available depending on your budget and goals. For example, Neighborly® home services brands have initial franchise fees that can run between $35,000 and $200,000, with a wide range of relatively low-cost options that can make franchising far more accessible. It's also important to remember that those fees for Neighborly brands include a range of vital benefits you don't get if you start a business on your own. For example, your franchise fees will include access to:
- Trademarks and logos
- National brand recognition
- Proven business model
- Established products and services
- Operations manual
- Initial and ongoing support
There are also many financing options available to those who wish to open a franchise. Some franchise brands offer in-house financing options to help new business owners get started. Another great option is a loan from the U.S. Small Business Administration (SBA), which can make financing a new business possible. There are also traditional bank loans and self-financing, such as borrowing money from a retirement account or an equity loan. These options make it possible for many people to become franchise business owners.
MYTH #4. You’re not really your own boss because the franchisor controls everything
This is perhaps one of the biggest misconceptions about franchising. While it's true that franchisors do provide support and guidance, they do not control every aspect of their franchisees' businesses. While franchisees do need to comply with the franchise agreement, franchisor’s guidelines, and standard operating procedures, these are mostly to protect the quality of the brand and to promote continued success for the franchise owner. Most franchisors don't micromanage individual businesses or get involved in day-to-day operations.
As a franchise business owner, your business is very much your own. You still maintain decision-making responsibilities for your business. You control how you run your location, who you hire and fire, and how you promote your business in the local area. You also control how much you want to work and how involved you want to be.
MYTH #5. Owning a franchise is a full-time job
While it is true that owning a franchise requires a significant time investment, it doesn't have to be a full-time job. In fact, many franchise owners own multiple franchises or have other businesses as well. The great thing about franchising is that it can give you the freedom and flexibility to make your decisions to work as much or as little as you want.
Most franchise owners need to be very hands-on at first with setting up a new location and getting operations up and running. But once your business is established, you can choose to hire a management team and take a more passive role. There are also many home-based franchise business models that offer far more flexibility than a standard job usually can. As a franchise business owner, you can have control over not just when you work, but where and how often, as well!
Move Past the Myths
Whether you're looking to be a full-time business owner, supplement your income, or want to grow a business while keeping the security of your full-time job — a franchise opportunity could be the perfect solution.
Neighborly® offers 17 different franchise brands in a wide range of home services which means you have plenty of possibilities to be your own boss, lead a flexible life, and live your dreams. To learn more about franchising with Neighborly, contact us today!