Since beginning my internet marketing business, I’ve spoken to and dealt with a few former franchise owners… none of whom had anything particularly positive to say about franchising. In particular, I’ve discussed the subject extensively with my current personal mentor (one of the current top internet marketers in the world… yes officially… it is ranked). This is a guy who lost two franchise stores and went USD $500 000 into debt soon after the recession began. The following article will discuss some of the major cons involved with franchising.

First and foremost, investing in a brand-name franchise is going to set you back somewhere in the hundreds of thousands of dollars. Now I understand that you’re investing in a potentially lucrative business, however, this is quite a massive sum of money to be investing in something with such an uncertain future. Why did my mentor fall $500 000 into debt? Well, the economy took a turn for the worse, and his franchises went with it. This was only a few short months after making his initial investment, and there simply wasn’t anything he could do to keep the business afloat… the economy was bad and people were spending less and saving their money. Many other franchisees and small business owners were forced to sell their businesses soon after the economy went down the tubes.

Now if you do get your franchise up and running, it’s certainly not the cakewalk many people believe it to be. Yes there are company systems in place to facilitate the running of the business, and a brand name will help you attract extra customers… but that doesn’t mean you can simply “plug in” to the system and let it run for you… there’s still going to be quite a bit of hard work involved. Franchises are definitely NOT “get rich quick” opportunities, and are by no means a guarantee of success, no matter how well-known the franchise you may be buying into.

Moreover, the hassle of dealing with employees exists. Who do you generally see working in franchise stores? That’s right… teenagers… most of whom like to fool around on the job, and don’t care which way business goes… good or bad.

Lastly, if you’re looking at buying into a franchise, it’s likely you’re looking to be your own boss. While as a franchisee you may not have to answer directly to anyone, you’re far from being able to fully-control the business. Simple rules such as wages, hours of operation, suppliers (you’re generally relegated to buying from the franchisor… no shopping around for cheaper and better deals), and so on, are out of your control. This system which helps you run the business is also going to greatly limit your flexibility as a business owner.

This article is not to say that every franchise is bound to be a failure, or that they’re impossible to run, just that they are simply not the sure-fire way to success many people think they are. Other, simpler, options do exist in the form of self-owned businesses. Online home-based businesses can be one incredibly lucrative option… an essentially recession-proof option without the requirement of a massive investment, employees, and overhead. Do your due diligence however and search out a legitimate home-based business as there are quite a few scams out there today.

Matt Mossop is a succesful internet marketer and home based business owner. To learn more about Matt and how he can help you, visit MattMossop.com.

Article Source:http://www.articlesbase.com/franchise-articles/the-cons-of-franchising-1305774.html

Buying into a franchise can be a very lucrative investment. However, as a franchisee your success is far from guaranteed. Company-placed systems are designed to help facilitate business operations, however they do not, by any means, make running a franchise easy. The following article will discuss the 5 major myths involved with franchising, and will reveal what you will be up against if you decide to open your own franchise.

Myth 1: Running a Franchise is Easy

There is no business opportunity in existence which isn’t going to take some hard work and effort to run successfully… and franchising is no different. Franchises have “automated” systems in place to facilitate the running of the business… a feature which attracts many to-be business owners because the hassle and uncertainty of figuring out how to run their own business is taken care of. While franchises do have a slightly higher success rate than independent small businesses, you cannot simply “plug-in” to the system and have the business run on its own. As in any business venture, there is simply no replacement for good hard work. If you’re looking for a “get rich quick” opportunity, look elsewhere.

Myth 2: Franchises are Safe Investments

Many franchise owners are recently out of business due to the horrible state of the economy… and I’m sure they would tell you otherwise. In franchising, as with any business venture, there is a degree of risk and uncertainty which comes with investing. The state of the economy is out of your control… if it starts going downhill, there’s nothing you can do about it. Moreover, once their business is up and running, many franchisees discover that running a franchise is not the calk-walk they thought it would be. Well… if you find out that you don’t have the drive, motivation, or skills it’s going to take to be successful, you’re out an investment likely somewhere in the hundreds of thousands of dollars.

Myth 3: A Popular Franchise is Guaranteed to be Profitable

You can’t actually see the ledger of any franchise you’re walking past, so you really have no idea how well-off that franchise owner may be. Just because you own a McDonald’s or Subway doesn’t mean automatic profits. A well-recognized name may help to bring in some customers, but you’re still going to need to have the right skill set to run a particular franchise. Additionally, proper management, advertising, and hard work will play a large role in your success or failure.

Myth 4: Buying into a Franchise is Cheaper than Starting Your Own Business

When setting up your own independent business, you are responsible for equipment, furniture, legal and consultation fees, licensing fees, internet and phone connections, taxes, etc, and of course… a location. While these are mostly taken care of when buying into a franchise, what you will pay for is the recognition of a brand name, and that company system with a proven business model… this will often set you back a few hundred thousand dollars.

Myth 5: As a Franchisee You’re Your Own Boss

As a franchisee you may not have a boss you have to answer to directly, however, you may not be provided with the total freedom you’re seeking as an entrepreneur. Variables such as wages, hours of operation, suppliers (no searching around for a better or cheaper deal… you have to purchase from your franchisor) will likely be out of your control… you are restricted to the freedoms the company system allows you.

As my opening sentence states, franchises can of course be very lucrative investments. This article is not to state otherwise… it is simply to state that they are not the cake-walk, or guaranteed ticket to success many people believe them to be. So if you decide to buy into a franchise, be sure you’re ready for what’s to come.

Matt Mossop is a succesful internet marketer and home based business owner. To learn more about Matt and how he can help you, visit MattMossop.com.

Article Source:http://www.articlesbase.com/franchise-articles/the-5-major-myths-of-franchising-1305762.html