If you’re looking at the possibility of starting your own low investment franchise, chances are good that you’ve heard some information about low cost franchises that may not be entirely accurate. Whether those tales were told to you by someone else or you managed to conjure them up on your own, it’s important to bring them to light and know what the truth is. Here are 6 common myths about cheap franchises that you simply shouldn’t believe.
1. Starting A Franchise Is Cheaper Than Opening Your Own Business.
Sometimes, this can be true, particularly when considering cheap franchises, however, it’s not always the case. Most of what a franchisee is paying for when they make their business purchase is the established business name, a business model that has already been developed, and perhaps royalties and other fees. Take a FranVentures franchise for instance. Business consultation and franchise brokering is initially one of the least expensive lines of work someone could get into, but buying a franchise opportunity from FranVentures is not simply getting into the business, but rather buying the track record and knowledge that only an experienced business can provide. Although a cheap franchise is the subject of discussion here, even when starting a low overhead business, it’s important to remember that the cheapest may not always be the best.
2. Recognizable Brands Make Better Franchises.
Truly, having a name that people recognize can be a big help, but that doesn’t mean you need one to succeed. There are many industries in which you may not be familiar with company names just because they aren’t highly publicized. Most people, for example, don’t know the names of vending franchises, but that doesn’t mean that Italy’s Best Gourmet Coffee is a poor work from home business choice. On the contrary, selling coffee machines to offices and keeping them stocked with name brand coffees is a brilliant business because it sells the second most imported product in the United States to the people who drink it the most, regardless of how well known Italy’s Best Gourmet Coffee currently is.
3. Bigger Is Better.
The American way isn’t always the best way. First, not everyone can afford a huge chain of retail franchises or a large IT firm, and second, not everyone is the kind of person capable of running that kind of operation. So for someone better gifted to operate a small business, bigger is certainly not better. Press-A-Print is a very small home based business that initially consists only of an owner, his family, and a hand-operated printing press. Despite its small size and price tag, however, the ultimate size is dependent only on how many clients the franchisee can amass and advertise for.
4. Higher Initial Cost Means Greater Eventual Return.
Just like the idea that "bigger is better," this may sometimes be true but is far from accurate when blown into a universal statement. U-Turn Vending and Books Are Fun are two of the cheapest business opportunities on the market, but that doesn’t mean that their returns are unimpressive in the least. The success of Books Are Fun is determined solely by the number of books that a distributor sells at book fairs and the like, so the revenue is as high as the franchisee wants to make them. And since U-Turn is a vending franchise, owners can look forward to an estimated average return of $70/hr, which is not too shabby at all for a business that practically runs itself.
5. Cheap Is The Way To Go.
Granted, the issue on the table is cheap franchises, so this does seem like a sensible conclusion to come to. Yet, taking the least expensive initial cost just because it’s the cheapest isn’t any more reasonable than choosing the most expensive simply because it’s the most expensive. On the scale of cheap franchises, the Maxx Merchants ranks the highest, running a price tag of $100,000, depending on some variables. Still, because this work at home franchise operates within the credit card business, it actually is in a market that has a high return rate and promising outlook for continued success. Sometimes cheap pays off, and sometimes expensive pays off, but many times in business, when you risk big, your potential return is big as well.
6. Franchises Are A Guaranteed Means To Success.
Though this isn’t specific only to cheap franchises, it’s an important myth to debunk whenever possible. Sometimes people can get it in their heads that franchises can’t fail, but that’s just not true. The odds of success are much greater for franchisees than for independent business owners (some numbers claiming a 95% success rate for franchisees), but there are too many uncontrollable factors in any kind of business to make hard and fast promises about the future, so don’t necessarily believe it when they do.
There are many more subtle franchising myths that circulate in regard to any and every kind of business venture, more than any article can sum up, but these are some of the most prevalent. The wisest piece of advice to take away is that any universal statement about business success or any polarized assertion is most likely oversimplified and therefore incorrect. Take all business advice with a grain of salt, find out what works for you and what doesn’t, and your business will profit from your prudence.
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