3 Myths About Franchising That You Need to Stop Believing

Most jobs, tax income and wealth come from high-growth corporations that begin with an amazing thought after which scale it. And on the subject of scaling, franchising is an more and more common choice. The Worldwide Franchise Affiliation found that American franchises offered greater than $825 billion of products and companies in 2022 — a quantity that is solely anticipated to develop.

Collectively, the 2 of us have many years of expertise working with shopper and franchise manufacturers and instructing it on the Tariq Farid Franchise Institute at Babson College, together with as co-hosts of the not too long ago launched Stars of Franchising podcast. We have seen firsthand how franchising affords a wonderful mannequin for corporations trying to broaden and scale in addition to people looking for entrepreneurial alternatives to create financial and social worth.

But amongst college students, seasoned executives and everybody in between, we ceaselessly encounter myths about franchising — from the notion that franchises run themselves to the view that they do not provide room for creativity and innovation. Listed below are three frequent myths we encounter, plus our recommendation on why franchising could also be best for you.

Associated: Busting Franchising Myths and Choosing the Right Opportunity

Fantasy #1: Franchising can succeed on autopilot

A successful franchise requires many various companions. Franchisors who create a model. Franchisees who work to broaden that model. Bankers and traders who prepare financing.

Franchising can pave the trail to development by a longtime model and operational mannequin. Opening a brand new retailer is less complicated when you possibly can be taught from an organization’s playbook for fulfillment. However that does not imply you possibly can sit again and the whole lot will probably be taken care of. Having a health plan that may yield outcomes is not the identical as truly exercising.

A franchisee who opens a brand new retailer should navigate the whole lot from actual property web site choice and planning for launch to management, labor and provide chain administration as soon as it is up and working.

Just about each franchisee and franchisor we communicate to says that they wanted grit, resilience and an entrepreneurial mindset to succeed.

Soozie Lazenby, who owns and operates 4 StretchLab franchises within the Tampa Bay Metro Space, told us that “Franchises do not run themselves. There isn’t any such factor as a semi-absentee proprietor.” Equally, Neal Faulkner, who went from a single Dunkin’ Donuts retailer 23 years in the past to a number of places and 500 staff at this time, insists that “Franchisees must work within the enterprise and be able to do each single job!”

Franchising is a superb alternative — however provided that you are prepared to do the work.

Fantasy #2: Franchising is not entrepreneurial

Folks sometimes image entrepreneurship as ranging from nothing and bringing an thought to life. Nevertheless it takes as a lot creativity to scale one thing that already exists.

Neal, the Dunkin’ Donuts franchisee, grew up on a farm in Kansas, which he describes as a extremely entrepreneurial atmosphere. Franchising provided the same demand to take possession of a variety of duties and be inventive in getting them carried out. Opening a brand new Dunkin’ Donuts location seemed like opening a enterprise from scratch: Neal had to determine building, conduct financial institution negotiations, handle his staff and extra.

The notion that franchising is not entrepreneurial partly depends on a picture of franchising as a top-down mannequin. Nonetheless, many franchises are laboratories for experimentation that may then unfold to the remainder of the model. The McDonald’s Egg McMuffin, the Dunkin Donuts’ Munchkin and the Planet Health Black Card had been all merchandise that began on the particular person franchisee degree.

Franchising can provide one of the best of each worlds: the prospect to be entrepreneurial your self and to profit from others’ entrepreneurship. Babson School President and Jiffy Lube Worldwide co-founder Stephen Spinelli Jr. shared with us how when one Jiffy Lube franchisee found a inventive innovation, it might be distributed to all different shops inside 48 hours.

Amanda Bialek, an skilled in franchise advertising and marketing, summarized it finest: “Franchising offers the chance to faucet into entrepreneurial spirit with the steerage of an amazing playbook.”

Associated: Aspiring Entrepreneur? Consider Perfecting Something That’s Already Built

Fantasy #3: Franchises aren’t native and are not meant for sure individuals or varieties of companies

Some individuals view a franchise as an extension of a giant company. However plenty of the time, franchise brands are run by people from the neighborhood, your neighbors, who’re on the lookout for a path to possession and entrepreneurship. These regionally owned and operated franchisees then create jobs and social affect, producing neighborhood advantages.

Equally, there is a notion that franchising is a match for individuals who have gathered a considerable quantity of capital and are on the lookout for a steady enterprise alternative. However at this time’s wave of franchisees is younger, they usually include recent concepts on staying in contact with new developments.

Edible Preparations is seeing a pattern of younger franchise homeowners who use Web-driven instruments to attach with prospects. Franchisors launching a brand new model will also be youthful. Cousins Jim Tselikis and Sabin Lomac joined collectively to found Cousins Maine Lobster in their late 20s and early 30s — and secured a 15% fairness funding from Barbara Corcoran on Shark Tank.

Simply as younger individuals should not overlook franchising, neither ought to individuals curious about companies exterior of the everyday restaurant manufacturers reminiscent of Panera or McDonald’s that folks typically consider as franchises. Whereas franchising is a superb mannequin for the meals trade, many different companies, from gyms to pressing care facilities to automotive dealerships, have discovered success within the franchise model.

The large message: Franchising is way extra native and expansive — when it comes to who entrepreneurs are and the varieties of companies they function — than you may count on.

Associated: Is Franchising Right for You? Here Are 4 Questions to Help You Decide.

Franchising could also be best for you

Franchising offers the chance to leverage a confirmed model or service to attain outcomes. It affords the prospect to be entrepreneurial. It affords room for development — multi-unit franchisees now account for many franchise items in america. And regardless of perceptions, many sorts of individuals and varieties of companies can embrace franchising.

Whether or not franchising is right for you depends upon your objectives and goals and the standard of the franchisor. It doesn’t matter what, success in franchising requires grit, management and an entrepreneurial mindset. With these in hand, franchising can provide a resilient path to financial success.