The Top 4 Problems With Going Into Franchising
The Top 4 Problems With Going Into Franchising
So is owning a franchising business, also known as a store front business, something that really lives up to its hype? Or will it be the worst thing that happens to your career?
The earliest problem you’re likely to face is getting the necessary funds. Money is most definitely a difficulty for many.
Say you’d like to become well versed in the business of running a universally recognizable fast food restaurant. For you and people like you to attend Hamburger University, located in Chicago, you’d have to have a net worth of at least one million dollars just to be considered for attendance! Imagine that before you even step foot into the fickle world of the franchising business, you’d already have to be relatively richer than many others. Of course, a traditional business set up isn’t that much cheaper, since you’ll need around a quarter of a million dollars to initiate that. If there’s no way you can come up with this sort of money, best that you not finish reading this article.
Then comes another problem, which is the high risk of failure. Roughly 70 to 80% of all store front operations end in failure after a very short life of no more than 2 to 5 years. Not surprising, if you really think about it , since the average small business entrepreneur doesn’t really start pulling in profits at a regular enough rate as quickly as you’d like to believe.
Next comes the issue of all the hard work and effort required. Since you’re planning on making this business your baby and trying to make it as successful as possible, no ounce of your energy should be spared in doing so. An average work day will normally range between 15-18 hours. Maybe the rewards early on won’t make all that work seem fruitful. So in addition to all this hard work, you’ll have to be patient enough so that you won’t simply throw in the towel a few years down the road and convince yourself that you’re way out of your league in this line of business.
Last but not least are franchise fees. These fees may be the ultimate bane of your existence, since they can significantly cut into your earnings. Consider this in addition to your normal business related expenditure and you’ll realize that maybe you won’t be filling your pockets with as much dough as you had initially imagined.
In the end, you have to understand that thinking a franchising business is the magical solution to all your financial worries is an extremely naive idea, indeed. However, not all hope is lost. Using the necessary tools, training and good sense can help you avoid falling into the disadvantages of franchising and hopefully you’ll be one of those who succeed.
The Top 4 Problems With Going Into Franchising - To learn more about this author, visit Sebastien Page's Website.
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If you’re trying to understand what a franchise really is, look no further than the most popular international fast food restaurant you can think of. It doesn’t get any easier than that! It would be a dream come true for many people around the world to own and run a fast food franchise like that which serves food to people every hour of the day, all around the globe. However, dreaming is not the best way to make business decisions. You have to really think and think hard about whether opening a franchise business is really worth the trouble for you. Would you really be happy and fulfilled?
So is owning a franchising business, also known as a store front business, something that really lives up to its hype? Or will it be the worst thing that happens to your career?
The earliest problem you’re likely to face is getting the necessary funds. Money is most definitely a difficulty for many.
Say you’d like to become well versed in the business of running a universally recognizable fast food restaurant. For you and people like you to attend Hamburger University, located in Chicago, you’d have to have a net worth of at least one million dollars just to be considered for attendance! Imagine that before you even step foot into the fickle world of the franchising business, you’d already have to be relatively richer than many others. Of course, a traditional business set up isn’t that much cheaper, since you’ll need around a quarter of a million dollars to initiate that. If there’s no way you can come up with this sort of money, best that you not finish reading this article.
Then comes another problem, which is the high risk of failure. Roughly 70 to 80% of all store front operations end in failure after a very short life of no more than 2 to 5 years. Not surprising, if you really think about it , since the average small business entrepreneur doesn’t really start pulling in profits at a regular enough rate as quickly as you’d like to believe.
Next comes the issue of all the hard work and effort required. Since you’re planning on making this business your baby and trying to make it as successful as possible, no ounce of your energy should be spared in doing so. An average work day will normally range between 15-18 hours. Maybe the rewards early on won’t make all that work seem fruitful. So in addition to all this hard work, you’ll have to be patient enough so that you won’t simply throw in the towel a few years down the road and convince yourself that you’re way out of your league in this line of business.
Last but not least are franchise fees. These fees may be the ultimate bane of your existence, since they can significantly cut into your earnings. Consider this in addition to your normal business related expenditure and you’ll realize that maybe you won’t be filling your pockets with as much dough as you had initially imagined.
In the end, you have to understand that thinking a franchising business is the magical solution to all your financial worries is an extremely naive idea, indeed. However, not all hope is lost. Using the necessary tools, training and good sense can help you avoid falling into the disadvantages of franchising and hopefully you’ll be one of those who succeed.
The Top 4 Problems With Going Into Franchising - To learn more about this author, visit Sebastien Page's Website.
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John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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