The easiest way to understand what a franchise is is to think of the most famous franchise in the world: McDonalds (TM). Many people around the world dream of owning and operating a famous franchise like McDonalds (TM). But is owning a franchise or a traditional window shop really worth it? Would owning your own business really make you as happy as you think?
What’s the deal with owning a storefront business? Is it just a hype or is it the real key to your financial happiness? Read on for the truth you need to know about franchise ownership.
Your first problem is a lack of money: Money will definitely be a problem: Did you know that you need a minimum net worth of $ 1 million just to get listed to attend Hamburger University in Chicago, Illinois? One million dollars! This is the University that all McDonalds (TM) business owners must attend to learn how to successfully run their store. You will investigate further and discover that you also don’t have the $ 250,000 you normally need to start a traditional business. You can stop reading right now if you don’t have this type of cash on hand.
Another problem with owning a franchise is that it is actually very risky: approximately 70-80% of traditional storefront businesses fail in the first 2 to 5 years. And the percentages are getting worse as the economy suffers. Added to this, the average “successful” business usually doesn’t start to consistently turn a profit for that long.
The third problem with owning a franchise or traditional storefront business is the long, long, long hours you have to work day after day – if you are thinking of owning your own business, like a McDonald’s (TM), I hope Be a hard worker: The average business owner works 15-18 hours a day running their business. It is hard work day after day. It is too difficult to make very little profit. If you are going to work 15-18 hours a day running your own business, how is that different from working in a factory every day? After a few years of this, you will quietly admit that you are lost, unless you like to work hard all the time, day after day. Month after month, year after year …
The fourth problem is franchise fees – franchise fees can be a real headache. These fees can really affect your bottom line. When you consider that you still have regular business expenses to pay, it is easy to realize that you are not making as much money as you originally thought.
Conclution
If you think running a traditional business or franchise is the answer to your financial problems, try again. Use common sense and the guidelines above to avoid falling victim to the downsides of owning a franchise.