Thank you Kellyanne Conway. Your “Alternative Facts” and the increasing number of memes around those two very special words, is the reason why this franchising article exists.
New: The Top 10 Alternative Facts About Franchising
- Franchising is the perfect business model for anyone wanting to be their own boss
- It’s next to impossible to fail as the owner of a franchise
- Owning a franchise business is less-risky than starting an independent business
- Franchise businesses are turnkey businesses
- Franchise businesses are actually businesses in a box
- Franchise loans are much easier to get than regular business loans
- Franchise contracts are non-negotiable
- Franchise brokers offer their services for free because they like helping people start businesses
- Business coaching franchises are popular because they’re low-cost and franchisees don’t need to have good sales skills
- The International Franchise Association’s leadership is quite balanced when it comes to who/what they focus their lobbying efforts on
Hold your horses. I’m not done.
The Top 10 Alternative Facts About The Top 10 Alternative “Facts” Listed Above
Now let’s go through the top 10 alternative facts. One by one.
- The franchise business model is perfect (good) for people who are; very comfortable with a rigid rule-based business system, have enough money (a $300k-$350k minimum net worth) to start a franchise, have enough patience (and money set-aside) to make it through the first year or two of a business startup, and who have their family’s support for becoming their own boss.
A friend of mine, Jeff, (a coder), created a Free Net Worth Calculator for you to use. Please don’t hesitate to use this free tool, as it allows you to easily figure out if you have the minimum amount of money needed to open a franchise.
You should also take my Free Franchise Quiz. 5,500+ other prospective franchise owners have. It’s designed to help you determine if you’re a good candidate for franchise business ownership.
- Of course you can fail as the owner of a franchise. I know several people who have failed over the years. As a matter of fact, it’s one of the reasons I’m not a franchise broker anymore. (Today’s franchise brokers are called many different things these days. Like franchise consultants or franchise coaches.)
I watched several people I helped get into business go out of business. It bummed me out. Bad. That’s why I am a franchise advisor-and have been for several years. I’m not a paid broker anymore. That means I don’t receive a brokerage commission from franchisors. That’s because they’re not my clients anymore.
The people who work with me to find profitable franchise opportunities they can own are.
Owning a franchise does not guarantee business success. But know this: If you choose the wrong franchise opportunity, you can lose your money.
If you do weak research, you can lose your money.
If you choose a lousy location for your franchise business, you can lose your money. (You can sued by your landlord, too!)
But don’t worry; it’s not all bad. Just make sure you know what you’re doing and that you have enough money to do it. Being your own boss rocks!
(Check out my GUARANTEED easy-to-follow step-by-step franchise course, so you can learn exactly how to choose and research a profitable franchise business)
- It’s time to delve into statistics a little.
Statistics about franchise business success rates have been bandied around for freaking decades. Like this one:
“You’re less likely to fail as the owner of a franchise vs. if you owned an independent business.”
That’s hogwash. Read this to see why. And this.
Please don’t fall for the “Franchise businesses are safer to start than independent businesses” crap. They’re not. But there are things you can do to reduce your risk. Like these 10 things.
- You’ve heard the word, “turnkey” right?
As in, “Franchise businesses are turnkey businesses.”
Here’s the deal; a “turnkey” business-at least to me, sounds like a business you walk into, turn the key and observe-becuase everything is not only set up for you-but it’s done for you. Sounds kind of nice. Except there is no such thing. There is no business, franchise business or non-franchise business, that offers a business that you buy, but don’t have to set up or run. So forget about it. It’s
- A cousin to a “turnkey” business is what’s often referred to in franchising as a “Business in a box.” As in, “A franchise is nothing more than a business in a box.”
I’m going to make this one easy for you. Read the article I wrote about my alternative fact concerning “Franchise businesses in a box” on Carol Roth’s blog.
(Carol Roth is a friend and supporter of mine; she’s also a Judge on this cool television show.)
- About small business loans.
Business startup loans, whether they’re for a franchise business startup, or an independent business startup, are not that easy to get approved for these days. (Although things are better than they were a few years ago.) Please keep that in mind when you’re applying for a small business loan.
There’s another way to get money to start the franchise of your dreams, but it’s not for everybody. It depends on where you are in life.
You can find out more here about an interesting alternative to a traditional small business loan.
- If you’re working with a franchise consultant or a salesperson at franchise headquarters (who after you tell them you’re going to hire a franchise attorney) offers the following advice, or advice that’s very similar, ignore them.
“Since our franchise agreement is non-negotiable anyway, it’s kind of a waste of money to hire an attorney.“
There actually may be a thing or 3 that does turn out to be negotiable. The only way to find out is to hire a competent franchise attorney. (I know several great franchise attorneys-if you’d like me to personally refer you to one, let me know.) Plus, as an added bonus, your attorney is there to protect your interests. Good stuff!
8. You do know why franchise brokers/consultants/coaches offer to “Help you buy a franchise for free,” right?
(Need a hint?)
I know a lot of franchise brokers. Most of them try to do the right thing. But you really know this:
You are not their client. The franchisors are. Because they are the ones who pay their commission.
The brokers/consultants/coaches don’t charge you for their services because the commissions they receive are ginormous. They’re typically getting 40-50% of the upfront franchise fee that you’re sending in to franchise headquarters when you decide to move forward on the franchise opportunity your broker presented to you.
In other words, if the franchise fee is $40,000, the broker gets a check for $16,000-$20,000 – usually within 7 days of you sending in your check and your signed franchise agreement.
9. Are you familiar with business coaches?
A business coach is a person who comes into a small business to consult with the owners and/or managers on any one of a number of different things. Marketing, accounting, operations, growth strategy, HR…you name it, a business coach can provide it. But here’s the thing…
These “clients” don’t appear out of nowhere. They need to be
cultivated found. You know what that means, right?
Today’s business coaches, a lot of them franchisees who’ve invested around $75k in total to become a coach, need to excel at sales…at business development. It’s pretty tough to coach small businesses if you don’t have small businesses to coach.
To find out the real scoop on business coaching franchises, read this 2-part article on business coaches.
10. If you’re thinking about becoming the owner of a franchise someday, I’m guessing that the information I’m going to share about The International Franchise Association isn’t something you’re dying to know about. That’s fine. If that’s the case, just skip this part of my article. Really.
But if you’re curious about the largest franchise association around, read this.
The International Franchise Association (IFA) isn’t only focused on franchising. Some of their energy-I’m talking about the mid-six-figure executives now, is focused on what most K Street associations etc. focus on. Lobbying. And until lobbyists are extinct, that’s what these guys (mostly) will do. They’ll hob-knob around with Senators and their brethren, wining and dining their way into their hearts and minds.
They’ll also make lots of critical errors in judgement, like what they’re currently doing with this potential Cabinet member.
So, now that you know that the IFA is basically a lobbying outfit, why should you care? It’s not really going to affect you if you become the owner of a franchise business. Right?
Actually, the IFA’s lobbying efforts could impact your franchise business. Things like tax rates and regulations can and will directly affect how your business does. Hopefully the IFA will do right by you. All of us want to have lower taxes and less burdensome regulations.
One more thing, and it’s important.
What if you become the owner of a franchise business, and the largest franchise association in existence-who’s voice (in a way) represents you and your franchise, loudly and proudly supports candidates and political views that are the 100% opposite of yours? Will it matter? Should it matter?
That my friend, is a question only you can answer.
Franchising Facts Vs. Alternative Facts About Franchising
There are certain facts about franchising that are well…facts.
Aren’t you glad you know what they are now?
The post New: The Top 10 Alternative Facts About Franchising appeared first on The Franchise King®.