Five Common Franchise Myths | By: John Mollica – CPA & CISA
Like with any topic, franchising comes with many truths and falsehoods. There are many common misconceptions people have about franchising which just aren’t true.
1- I Can’t Make Any Money With a Franchise.
If you only know how untrue this statement is. Of the hundreds of franchisees we work with, most of them are making an absolute killing. A recent QSR (Quick Service Restaurant) franchisee we started working with has already broken six figures this year. Short of doctors and lawyers, making that sort of dough at a regular 9 to 5 job is tough.
Some people don’t make money with their franchise. Why? Typically because they don’t know what they are doing. They try to do everything themselves to save a penny, but end up missing out of thousands of dollars in opportunities. This is not a sustainable business model.
2- I Won’t Own My Franchise.
False! You absolutely own the franchise that you purchase. At some point, depending on the franchise, you may be required to sell your business back to the franchise. But you are compensated for the full value of your franchise. So the better you do, the more you’re franchise will be worth! Plus, if you’re among the best, the franchise may even allow you to keep running your franchise indefinitely. That’s why it’s so important to do things right from day one.
3- Franchises Fail Often.
That’s actually not true. The fail rate of franchises is close to the rate of independent business. Any business can succeed or fail. It depends on 1) your effort put in and 2) the quality of the advisors you surround yourself with.
4- Buying a franchise is like paying for a 9 to 5 job.
Not true at all. When you work for a company, you have no investment and no ownership stake. You are exchanging time and skills for a paycheck. When a franchise, you own a tangible business that you can later sell or expand. You can open multiple units, hire people, expand into other businesses…it really all depends on your financial and life goals. These choices aren’t as accessible and visible to you as a regular employee.
5- The franchisor gets all the profit, so there is nothing left for me.
This CAN be true, but it does not have to be. You could easily also say “as a business owner, my vendors get all my money, so there is nothing left for me.” The key is being able to manage your profits. You have to pay yourself FIRST, and have a plan in place to do so.
Believe me, if you go into franchise ownership and do not put a place in place to invest your profits in yourself, you will greatly be setting yourself back and setting yourself up to fail. The fact is, you can make globs of money with a franchise. You will own your franchise. And you don’t have to fail!
We work with hundreds of franchisees that are successfully running their franchise. They are seeing (and we are reporting) their sales go up month after month.
Why are they successful?
Because they’re working hard and they have the right advisors around them. Between their franchisor and My Franchise CPAs, we work together to cover every single gap in the franchise process so you truly can run your franchise on autopilot.
Book an appointment to start or grow your franchise today!
Your Franchise CPA,
John Mollica – CPA & CISA