This piece called 8 Franchise Ownership Myths got my attention the other day. I like myth busters. This one, however, surprised me; some of those myths seem like they are really true. For example:
Myth 2: I can only be successful in a business I love.
Makes sense to me, so I guess I buy the myth. But Terry Powell says:
Believe it or not, businesses based on an owner’s background have the highest failure rate. Your franchise business is a vehicle to the lifestyle you’re seeking. If you limit your choices to what you’re familiar with or good at, you’re placing yourself at a major disadvantage by ignoring a huge number of possibilities that are outside your realm of past business experience.
Then there’s this one:
Myth 4: I can’t be in a business I know nothing about.
Which also seems to me like it would be true, but Powell says this one is a myth because. . .
Of course you can. It’s natural to want to stay in your comfort zone and stick to areas you have experience in. But as a franchise owner, your job is running and growing your business, no matter what it is. Remember, you have transferable skills.
Maybe. Do most people getting into franchises come out of management somewhere? Do they have business experience? I don’t know, but I do wonder. Aside from studying McDonald’s for a couple of years while consulting for Apple Computer, teaching at McDonald’s Hamburger University once or twice and doing a custom business plan software job for McDonald’s, I haven’t had a lot of experience with franchises. And even that was more than 12 years ago, all of it.
So I asked my friend Joel Libava. He’s on Twitter as @franchiseking and his blog The Franchise King is on lots of lists of better business blogs. He’s also a fellow contributor to Small Business Trends and some other blogs. It turns out that Joel had trouble with some of those myths, too.
On his Myth 6, “Franchises stifle creativity,” Powell says, “The only limitations you have are those that have already been proved to generate income.” Joel says:
That is untrue. Folks, you still must do things their way–not your way. Just because a couple of McDonald’s popular sandwiches were suggested by some franchisees, please don’t go into a franchise thinking you are going to be able to do that. You won’t have time to think of wonderful new ideas. You will be running your business. From their blueprint.
On Myth 7, “I can’t afford a franchise,” Powell says: “Sure you can, if you look at it for what it is: an investment in your future.” But Joel points out that Powell sells a franchise:
Interestingly enough, Terry’s own franchise offering comes in at–you guessed it, under $100,000. Most franchises that have a total investment of under $100,000 will involve heavy sales and marketing. Most folks are not that sales-oriented. If you don’t have a dynamic sales personality and superb sales skills, be careful of the lower investment opportunities. If they don’t require a physical location, that means that the customers won’t be coming in to see you. You’ll be going out and finding them.
On Myth 8, “I’ll have to quit my job to become a franchisee,” Powell says: “Many franchise concepts are specifically designed for people who are working other jobs.” Joel doubts it:
“What? Only a handful of franchise opportunities are designed for people that are keeping their jobs. They require deep pockets and are usually multi-unit franchises that take a lot of time to grow and make money at. But they can be great opportunities for some.”
So there. Different points of view, always interesting. Whom do you believe?