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Reasons Not To Buy A Franchise Debunked


Guest post by: Anne Barr
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Transfers vs. New First Time Franchisees - By Anne Barr

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1. The franchisor makes all the money
This is a common misconception. Yes, Franchisors do charge an up front franchise fee. Yes, they also charge an ongoing royalty payment. But most of this money is invested in you, your training, and brand awareness nationally and in your market. The franchise fee you pay gives you the right to the Franchisor’s system. They train you in all aspects of their business. The ongoing royalty payments are used for advertising and to keep the brand in the public eye. It is in the best interest of the Franchisor to make sure that Franchisees are profitable and happy. If Franchisees are unhappy, it will be very hard for the Franchisor to sell more franchise territories.

2. Franchise businesses are too expensive
Aside from the initial franchise fee (which provides you with thorough training on all aspects of the business you are buying), franchised businesses cost the same to start as independent businesses. This is where your research comes in. Choose a franchise model that you can afford. They range from a couple thousand dollars up to a half million or more depending on the type of franchise and the industry.

3. I can’t wait 2-3 years to make money
You may not have to wait 2-3 years to make money. Research – Research – Research. When you are deciding which franchise you want to purchase, call existing franchisees…ask them if they are profitable and if so, how long it took them to start making money.

4. I am not interested in auto or food
Great! You don’t have to be interested in auto or food to find a right fit in franchising. There are over 5,000 franchise opportunities in 80 different industries. There are thousands of franchise opportunities that have absolutely nothing to do with auto or food.

5. I don’t want to work 24/7
Again, this comes down to research! You need to thoroughly understand what you are getting into before you purchase a franchise. Ask existing franchisees how many hours they work now and how many hours they worked when they first opened the business. Starting a franchise or any business is hard work. You need to be prepared to work long hours (at least in the beginning) to establish your franchise.

6. The market is already saturated
Do your research! With all the different franchise opportunities available, carefully research which ones you think would be successful in your area. What types of retail or services are missing in the area around you?

7. I don’t want to buy myself a job
Buying a job is usually not the goal of franchise buyers. Sure, you will have to work in the business at least in the beginning. As your business grows and becomes profitable, you can slowly step back and put managers in your place. There are also other opportunities in franchising like Area Developer or Master Franchise opportunities that allow you to build your own local empire of franchisees and create residual income for yourself.

Franchising is a great way to get into business ownership. Confused by all the options out there? That is why you need to utilize the FREE services of a franchise consultant/broker. They can help you with the research and selection process of buying a franchise.


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Transfers vs. New First Time Franchisees - By Anne Barr

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About the Author: Anne Barr

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Anne Barr has over 32 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company.
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