Franchise opportunities are a hot commodity. Business magazines tout the top 10 franchises of this industry and the top 500 franchises overall. The reviews spout promises, the ads are absolutely enticing and financial success beckons behind the shiny promises.
So what’s really behind the franchise opportunity curtain? Is purchasing a franchise an act that opens the door to financial freedom, to a sports car, life on the beach and a beautiful companion? Or is purchasing a franchise just another way to give all of your hard earned money to someone else, only to end up paying them royalties and fees on every dime you make?
Sorting out franchise fact from fiction isn’t easy. Companies who offer franchises get their most happily satisfied and successful franchisees to appear in ads. (Or they hire actors to look and act successful and happy.)
Reading through franchise listings can leave you bleary eyed and wondering what happened to simple math. Franchises offer different business models, different growth opportunities and a world of different participation requirements.
Common franchise opportunities offer training and hold your hand through the setup process and in initially running the business. They’ll require fees, some hefty, in return for all this assistance. It isn’t unusual for a high level franchise opportunity to cost upwards of a quarter of a million dollars and that’s before the monthly royalties and advertising contributions that are mandatory.
There’s no room for individuality in operating a franchise. The businesses all look alike. Everyone who operates one of the businesses dresses like all the other business operators. It isn’t unusual for a franchise company to issue a non-compliance warning to franchisees who have the smallest item out of place or turned in the wrong direction.
If you want a cookie cutter business and can afford to spend thousands of dollars for the opportunity to continue paying royalties and fees, a franchise might work for you. If you are looking for the success factor at a little bit lower cost, there are legitimate home based business options available.
For those franchises that do work, that do make the franchisees money and help them achieve financial freedom, the business model is well developed and tweaked as often as industry, technology and the business environment change. Successful franchisees take the knowledge offered by the franchise opportunity and make it work for them.
It is interesting that the president of the American Franchisee Association says that many of the members are unhappy with the franchise they purchased and would have made different choices if they knew then, what they know now. A study by a professor at Wayne State University showed that the franchise failure rate was in excess of 30%, and that independent entrepreneurs make higher profits. So what does all this tell us? It should be screaming to us that we need to do our homework. There are tens of millions of people looking for a legitimate home business, so sales and prospects are ripe at this point in time. Just be wise and cautious, and get the appropriate information so you are making the right choices.
As you are looking for a well-developed business model that produces results but doesn’t require the extreme investment and other fees that franchises require, you’ll find a wealth of information and opportunity available here.