How a Franchise Agreement and a Franchise Disclosure Document differ
There are two documents that are of vital importance...
The internet is rife with myths and misconceptions, and franchising is a common victim of digital misinformation. Here is a look at some common franchising misconceptions. By understanding the facts about this type of business, you will feel more confident about your decision to pursue a career in franchising.
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Franchising is a pyramid scheme
Many people believe that franchising is a form of multi-level marketing in which those at the bottom of the pyramid do the work and those at the top make the money. This is untrue.
Franchising is a flatter structure in which each franchisee is given the tools and training to enable them to run a thriving business, giving a percentage of their profits to the franchisor as a royalty payment. This payment covers the use of the franchisor's brand and allows the franchisee to sell branded products or services, receive ongoing support and training, and piggyback on the franchisor's marketing efforts.
Franchisors want their franchisees to succeed, as this increases the overall value of their brand.
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I can't afford to join a franchise
There are plenty of costs involved in joining a franchise. You must factor in the franchise fee, legal expenses, royalty payments, and the cost of renting or purchasing a property and stocking it. You may need to invest in new technologies, cover the services of an accountant, and even pay employees. It is not a small undertaking.
However, unlike starting a business from scratch, franchises are available in a wide range of entry price points, and various grants and financing options exist to help you to make your entrepreneurial dreams a reality. The value gained for the cost of the franchise fee is designed to help you hit the ground running, and franchisees often turn a profit more quickly than they could have if they had done it alone.
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Franchising will not offer a good work-life balance
Business owners are busy people. They are ultimately responsible for the success of their business. Particularly in the early stages, they will be the manager, the staff, the cleaner, the HR department, the payroll and stock manager, the social media marketer, and much more. This may not allow much time to enjoy hobbies and outside interests.
The great thing about franchising is that franchises exist across a wide range of industry sectors, and many businesses are scalable to suit your availability and existing commitments. By choosing a business that interests you and fits in with your lifestyle, you will be able to maximize your work-life balance while also being your own boss.
If you have decided that 2024 is the year that you will start your own business, do not discount franchising. Take the time to learn more about it, talk to those who have already made the leap, attend networking events, and do the research that is necessary to make an informed decision. Franchising is not for everyone, but it offers plenty of opportunities to passionate individuals who wish to pursue it.
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