franchising aspects Oct, 13 2009

Truths and myths of a franchise business

Are you an aspiring entrepreneur with dreams of having your own business. The best available option is to take up a franchise because compared to an independent business a franchise already has a brand, customer loyalty and systems in place. Despite all t

By Abha Garyali
Sub Editor
Truths and myths of a franchise business

Regardless of being a rewarding business, there are a number of misconceptions about franchise ownership. Some of the common myths about franchise are:

Finding the right business: Many entrepreneurs keep waiting for the right business opportunity that fascinates them. The entrepreneur should not limit his choices to what he is familiar with or good at. By doing this he will be placing himself at a disadvantage by ignoring good business opportunities just because he is unfamiliar with them.

Lack of freedom: Before taking up a franchise some entrepreneurs doubt that they will not have any freedom to run the business as the franchisor would run the business in his way. But as per the franchise outlet is run there a few limitations that a franchisee has to keep in mind like the original signage, colour combination and interiors of the store etc. for the success of the franchisee’s outlet. Except this the franchisee can use his creativity and come up with new ideas and suggestions for his outlet.

The franchisors just guide the franchisees to follow the original décor and designs. Beyond that it is the franchisee’s wish the way he wants to run his business.

Individual business and a franchise are equivalent: To a business novice there is no difference between running an independent business and taking a franchise but there is a world of difference between the two. Franchisee has to invest his money in the business and give royalty to the franchisor whereas in the independent business started by the individual he does not get any support and recognition. The entrepreneur who runs an independent business does not even get the benefit of the brand image to support the business from the beginning. Moreover the franchisee has the support and training of the franchisor, which helps him grow more quickly than he could on his own.

Financial Fable: There is another myth regarding running a franchise business that one has to have adequate funds but the truth is that anyone with a basic business sense can run a franchise availing loan from banks and other sources. Some entrepreneurs believe that they need a lot of money to buy a franchise but there are a few franchises in which the cost of running is quite low. The one time fee to the parent company and royalty given is also reasonable for any aspiring franchisee.

Bigger the franchise, the more chances of success: It’s true that a big franchise company can give better training and has stronger marketing systems. But smaller franchisors too can provide better encouragement and a more friendly relationship for franchisees to develop.

The franchisor just wants to get richer: To many of the inspiring entrepreneurs it may seem that the only concern of the franchisor is to get richer by taking the fees from the franchisee but in reality the franchisor cares for the success of the new outlet as it will add to his brand success. The parent company provides proper training, guidance in marketing etc to the new franchisee, thereby reducing the risk of failure.

Time Devotion: People who want to supplement their income can also go for franchising. Many franchisors prefer full time franchisees but there are some franchise concepts that are specifically designed for people who are doing other jobs as well. Therefore it is a myth that one requires to devote all his time to a franchise.

Well these are a few myths mushrooms in every entrepreneur’s mind. All these myths   can turn true if the prospective franchisee does not gather all the information about the company before buying the franchise. If you do your homework properly you can find the right franchise opportunity. But a franchise can fail also, not due to these myths but the people involved.

Related: Re-selling: a boon for franchising

Click Here to add Comment
Please add your Comment
Insta-Subscribe to
The Franchising World
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
OR Click here to Subscribe Online
Sell Business 2017
Sell Franchise 2017
Daily Newsletter

Submit your email address to receive the latest updates on news & host of opportunities.

Most Section

Entrepreneur The Franchising World Retailer 2017

Recommended For You
Newsletter Signup
Submit your email address to receive the latest updates on news & host of opportunities.
Franchise India Holdings Ltd

Copyright © 2009 - 2017 Franchise India Holdings Ltd.

The information contained herein is of generic nature only, and Franchise India is not, by means of this website or any part thereof, rendering professional advice or services. Before making any decision or taking any action that might affect your finances or business, you should consult a qualified professional advisor. Your use of this website or any of its pages or links given, is at your own risk and you assume full responsibility and risk of loss resulting from your usage. With respect to use of the website, kindly visit


Tell us what you think!