You Know What - Franchising is Not For Everyone
The number of folks that dream of someday owning their own business was once estimated at nearly 35%, but starting and owning a small business is a life changing event. In fact, not only is starting a small business a life changing but new business owners go into huge debt and spend all their life savings just to risk the chance of going for it.
Worse, the risk of small business failure amongst new businesses is something like 50% in the first three years and 75% first five years. Why do small businesses fail? The number one cause is undercapitalization, next is lack of expertise or business experience. Maybe it is no surprise then that Franchises enjoy a much lower failure rate.
Of course, franchised outlets are not without failures, the failures that do occur are just much less than other small businesses. Franchising may have lots of advantages such as better financing terms, more evolved business model, comprehensive training and on-going assistance and expertise, but nothing is guaranteed.
It has been said that owning a business is not for everyone, indeed, nothing could be more true, and just like this truth is observable, folks also need to realize that franchising is not for everyone. A true entrepreneur may not like working in the strict environment of a franchise organization.
Once someone signs a franchise agreement they are obligated for the term of that franchise contract to follow the Franchisor’s program, that is mandatory otherwise they could be terminated and lose all their investment monies. So, whereas it is true that franchises have lower failure rates than other small businesses, nothing including franchising is sure thing. Please consider this.
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