Franchising

Franchising can be a fantastic route into business and every year thousands of people make the decision to start their business with a franchise. While buying the right franchise can be almost a fool-proof formula for success, it can also quickly lead to financial ruin, far more frequently than you would imagine.

A mediocre or bad franchise, which you will normally only spot after you've invested with them, can quickly turn your life into a living nightmare. We've seen franchisees invest vast sums of money, only to lose it all and then to be sued by franchisors for everything they've got, including their homes.

So Why Do Bad Franchisors Exist At All?

The simple reason is greed - there are huge sums of money involved in franchising, and there's always somebody who will try to make a fast buck. The attraction to cheat is enormous. When you sign up for your franchise, you hand over a mountain of cash to pay for it. This big hit of cash really motivates the franchisor to keep selling franchises, because in a bad franchise, all he's selling is a cheap copy of the manuals and some training - stuff he can print all day long for just a few dollars.

And once the dust has settled, your dream of a great business is history and you're stuck in a dead-end business for a fixed period of maybe 5 years or more. This guide will help you reduce the risk of losing everything to a clever sales pitch from the wrong franchise.

Introducing The 7 Myths of Franchising

There are 7 commonly held beliefs about franchises that don't stack up. For a bad franchise, you will find that every one of these so-called "facts" of franchising are outrageous bare-faced lies, told to you by franchisors who just want to rip the cash from your hands and leave you high and dry, with no chance of making a decent living from the empty promises they've sold you.

These are the "franchise vampires", who say what you want to hear until you've bought. Once they have earned your trust and got your signature on their cast-iron 5 year franchise agreement, they drain the very lifeblood from your business dreams and take you for every last dollar, yen, pound, rupee, euro or penny that you have, just to feed their own greedy ambitions.

The myths of franchising are:

They're all turnkey businesses
They all have proven systems
80% of franchises are still running after 5 years
The brand you're buying has real value
You'll get great ongoing support
Your territory will be protected just for you
Your bank manager gives unbiased franchise advice

The Bottom Line

Pick your advisors very carefully and double-check everything they tell you. Almost everybody has a vested interest in you buying a franchise. At best, you will get no advice. At worst, you'll hear the 7 myths repeated as part of the poor advice you are likely to get from them.