Six Top Franchise Myths Debunked
As with any type of business, you will hear many different opinions about starting a Mesa franchise. With so many differing opinions, however, it can be difficult to determine what is actually true. Here are six of the most common franchise myths debunked.
1. It’s Impossible to Fail with a Franchise.
Even with a proven business model and marketing plan, it is absolutely possible for a franchise to fail. While the franchise business itself may be pretty impressive, it still takes a human leader as franchisee to get the job done. Just because other franchises have succeeded, do not think yours will automatically succeed without hard work.
Franchisors may minimize the work when selling you a franchise. Do your own research. A good place to start is a careful review of the Franchise Disclosure Document (FDD). You and your lawyer must review it carefully.
2. The Franchisor will Provide Everything.
Franchisors do usually provide an operating system, training, support, branding, a proven marketing system, the necessary technology and even real estate assistance. However, there are some key aspects of business that a franchisor absolutely cannot provide: motivation, determination, business ethics, management skills, customer relation skills and more. These things are vital to a successful business, and your franchisor can’t provide them for you.
3. There is No Risk with a Franchise.
While there may be a decreased risk with a franchise, there definitely is still some risk. Make sure you know what those risks are, so you are prepared to confront them.
4. Running a Franchise is Easy.
If were that easy, then everyone would do it. The truth is that running every franchise is a challenge. Much of the legwork and research is done for you, but there is still a lot of day-to-day work that must be done. And it is work; it will take time and money to get your franchise business up and running successfully.
5. Franchise Terms are Non-Negotiable.
Before you buy a franchise, you will have to sign a franchise agreement. This document is a binding contract between you and the franchisor and will spell out the agreement terms. Make sure you have an attorney read over this agreement before you sign it. Some franchise agreements are written in stone, but most have some room for creative negotiations. While your attorney may not be able to move mountains with the franchisor, if you don’t ask you won’t receive.
6. A Franchise Business Loan is Easy to Get.
In the past, franchise loans were usually a little easier to obtain when compared to a traditional business loan. Today, banks are treating franchise loans and business loans much in the same way, and today’s lenders are particular about whom they lend to. A lender will look at your qualifications and make an informed decision based on your credit and financial situation. Whether your franchise has a proven success record is important, but there are many other factors.
Do not lose heart if you find it difficult to get a business loan approved. Greenbox Capital is ever ready to extend financial support to newbie business ventures. check their website for more info.
An experienced franchise attorney can help you recognize other myths, and help you minimize the risks of starting a new franchise business.
Written By Brad Denton
40 N Central Ave #1400
Phoenix, AZ 85004
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