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

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photo credit: Phillie Casablanca

1 Review Your Market Focus
A precise marketing focus is essential for any successful business. In a recession it’s more important than ever. Review your focus. If necessary, narrow it. Review your sales and profit history. Where and how do you make your money? Which products are most successful? What do you specialize in? What do your best clients expect from you? Don’t broaden your focus. A recession isn’t the time to add new products and services. Concentrate on what you already do best and keeping the business you already have.

2 Reinforce Your Relationship With Your Best Customers
If you don’t know who your best customers are, find out quickly. In a recession, it could be difficult to gain new customers. Instead of spending money on new customer acquisition, spend it on sound customer retention. Find out what more your best customers expect from you. Where possible, provide it. Don’t guess, ask. If you can, visit your best clients to discuss their needs and how you can meet them.

3 Define Specific Marketing Targets
Competitors will contract and even fail during a recession. They’ll leave customers who need attention. Find out who they are and be ready to service them. They’ll also leave very able employees looking for work. Keep marketing in a recession. But make sure it’s very specific to the business you already have and wish to keep and to similar new business you want to obtain. Spend no money on “broad” or “general” marketing.

4 Create A Service “Edge”
How can you improve the quality of service that you offer? What can you do to make dealing with your company the sort of memorable experience that customers will want to repeat? You may have to reduce your prices. So will your competitors. Prices fall in tough times. Being “the cheapest” or “most inexpensive” won’t differentiate your business. Outstanding customer service – absolutely outstanding, not just better customer service – will differentiate your business in the marketplace.

5 Avoid Chasing Shadows
In a recession, lots of well meaning friends and colleagues will offer advice. They’ll encourage you to “move into different markets” or “take advantage of other opportunities”. They’ll advise you to and try something new. If that means you stop doing the things you do well and move away from the things you’ve built your business on, ignore them. A recession isn’t the time to chase the shadows in unfamiliar markets.

Conclusion
Resist the temptation to line extend, increase your product range or start a drive for new customers. Yet that’s what lots of small-medium business owners and managers will try to do. Be different. Consolidate, survive, revive!

Leon Noone invites you to contact him on http://www.leonnoone.com where you can collect your free copy of his 42 page Special Report: “5 Proven Methods For Improving Employee Performance On The Job”. He’s published books on staff selection and team development as well as various video, text/audio and self instruction programs on selection, training, motivation and performance systems.

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