A Franchise Is Not a Start-up: 3 Truths Businessmen Need to Know When Making the Transition


You’ve been a successful business owner a while, and you’re tempted to try franchising. You’ll make sure to buy one that the masses recognize and have stood the test of time. Combined with your business savvy, there’s no way you can fail.

The shocking reality is that managing a start-up is different from managing a franchise. The contrast exists from writing the business plan to marketing your products.

If you’ve set your eyes on being a franchisee, there are three truths you’ll have to accept to succeed in this enterprise.

Freedom Is a Myth

Franchises thrive on uniformity and conformity. This means that you’ll still be the boss, but you don’t have free rein on everything. There’s a home office to take orders from and people to answer to.

Venturing into a franchise means operating under a conventional system, not establishing your own. You’ll receive training about the brand and its practices. The knowledge the pass on to you is what you’ll use to supervise the day-to-day operations of your store.

Unlike in start-ups, where you have the liberty to let your creativity run wild, this type of business puts limits to protect its branding. Your great advertising ideas will have to take a back seat to a franchise marketing agency. Their expertise lies in marketing to a larger scale and managing the unique challenges that come with it. Getting a franchise marketing agency early saves you from critical mistakes and financial blunders.

Choice Is Integral

Project management

There’s wisdom in choosing a well-known brand, but don’t stop at that. Do your research well about its industry standing and performance record.

It’s crucial in dealing with the myth that franchises are less likely to fail compared to start-ups. Here’s a tear-jerker: franchises and start-ups fail at almost the same rate. While this doesn’t apply to all, it’s a fact that hits people hard when they buy a franchise only because entrepreneurs shower it with accolades. Awards and impressive internet presence aren’t always reliable measures of a franchise’s stability.

You’ll want to one that has undergone different economic climates and survived. The new franchise you’re eyeing looks promising, but not as much as one that has proven itself through time. Bring out your inner sleuth and investigate before you buy.

Lawyers Are a Must

Before you sign on the dotted line, ask yourself how well you understand the contract. You might not understand some sections, especially if it’s your first time venturing into a franchise.

When you hire an experienced franchise attorney, you protect your rights and interests as a franchisee. It starts with the franchise disclosure document (FDD), which you should receive by law. This comprises of around 150 to 200 pages and contains details on your obligations and restrictions as a franchisee. Understanding the FDD helps you steer clear of termination and possible fraud. Franchise attorneys deal with a lot of FDDs to review or author them. They’ll be the first to know if you’re stepping into a nightmare waiting to happen.

Franchising is a promising endeavor for those who do it right. Dive into it with the right expectations and be flexible enough to learn new things along the way. There’s nothing a boss mentality can’t overcome.

About Sarah Bennett 416 Articles
Sarah is a highly experienced legal advisor and freelance writer. She specializes in assisting tech companies with the complexities of the law and providing useful information to the public through her writing.