5 Myths About Starting a Franchise
Starting your own business is both an exciting and challenging journey. We debunk five of the most common myths about investing in a franchise.
Starting your own business is both an exciting and challenging journey. We debunk five of the most common myths about investing in a franchise.
There are many franchising myths that can influence an entrepreneur’s decision: that you need to be an expert in the industry, that you will have little freedom or that a well-known brand guarantees profitability. So, what is actually true? Here are 5 common myths about starting a franchise.
Myth No. 1: Location is everything
A good location can help attract customers, but it does not guarantee the success of a franchise. Local business activity, accessibility, competition, rental costs and the ability to attract and retain customers can be just as important.
The reality: The best location is not always the most expensive one. A strategic area with businesses nearby, good accessibility and controlled costs can offer better conditions for developing the business than premises with excessively high rent.
Myth No. 2: You need to be an expert in the franchise industry
Not necessarily. One of the advantages of franchising is gaining access to the knowledge, processes and experience of an established network. In many business models, commercial skills, management ability and leadership can be more important than arriving as a technical specialist.
The reality: A good franchisor provides the knowledge and tools required to learn its business model. What remains fundamental is the franchisee’s commercial attitude, commitment and willingness to develop the business.
Myth No. 3: Opening a franchise is more expensive than starting from scratch
A franchise requires an initial investment and may include an entry fee, but starting an independent business also means creating a brand, developing processes, finding suppliers, acquiring customers and building the operation from the ground up.
The reality: The entry fee should not be considered in isolation. A franchise includes brand value, know-how, processes, tools and support that an independent entrepreneur would otherwise need to develop separately.
Myth No. 4: You have no control over your business
A franchise requires franchisees to follow certain brand standards, processes and operating guidelines. That does not mean the franchisee stops managing the business: they lead their team, develop their local market and manage relationships with customers.
The reality: The franchise gives you the system and overall guidelines; you manage the business within that model. Shared standards are precisely what allow franchisees to benefit from a common brand and way of working.
Myth No. 5: A successful franchise guarantees profitability
An established brand, proven processes and network support can make the path easier, but no franchise can guarantee financial results. Management, commercial activity, competition and market conditions still influence business performance.
The reality: A franchise provides tools, experience and support that can help develop the business, but the franchisee’s involvement and commercial ability remain essential to making the most of them.
One extra myth: a franchise generates passive income
This is another common misconception. Being a franchisee means actively managing a business: customers, employees, commercial activity, costs and operations all require attention.
The Federal Trade Commission (FTC) also identifies passive income as one of the common myths surrounding franchising, noting that franchise ownership generally requires a significant commitment of time, effort and resources.
The reality: A franchise can provide a model, a brand and support, but it does not replace the work of the franchisee. It remains a business that has to be managed and developed.
So, what should you consider before opening a franchise?
Beyond the myths, five areas deserve particular attention before making a decision: investment, business model, training, support and franchise conditions. Speaking with existing franchisees can also help you understand how the business works in practice.
You can learn more about the MBE business model and explore stories from entrepreneurs within the MBE network.
If you are considering starting your own business with an established network, discover what it means to open your MBE franchise and the steps involved in becoming a franchisee.
