Debunking 6 Common Myths about Food Franchising
In today’s cut-throat business world, staying one step ahead of the competition is an uphill task. In order to gain an edge over your rivals, you need to think out of the box. A strategy that can give your business a visible and long-lasting competitive advantage is by getting into franchising. Whether it’s a restaurant franchise or as simple as a fast-casual pizza shop, an effective food franchise can not only help you achieve accelerated growth but also protect your brand from the competition.
A well-planned and implemented food franchise strategy will help you bring in more revenue, lower operational costs, increase profit margins, and grow faster than operating as a standalone entity. If you are planning to take your business forward by franchising it, we have listed 6 common myths about food franchising that you should know before taking any further steps.
Myth 1: Food Franchising is an Expensive Process
This is a common misconception among aspiring entrepreneurs. It is true that the initial investment required to set up this kind of business is high, but once you start making a profit, you will be earning back your initial investment. If you have the right business model, you can make significant profits even in the short run. Food franchising is one of the few industries where you can earn an exceptional ROI in as little as a year.
It’s been proven in many cases as many food franchise opportunities offered by various franchisors in the food industry likely have strong business plans. Part of these opportunities s that you can also minimize your upfront investment by choosing a franchise concept that requires minimal investment. This will allow you to get started with your business without having to put a lot of money upfront.
Myth 2: Franchising Leads to Loss of Control
This is one of the most common fears among entrepreneurs who are looking to start a food business franchise. Getting into this space is a win-win situation for both the franchisor as well as the franchisee. While the franchisor benefits from the name recognition, franchising helps franchisees to earn a living by leveraging the brand equity of the company they represent. You will also have to provide your franchisees with the necessary support, resources, and assistance for the effective operation and growth of the business. For example, if you are selling burgers, you have to ensure that the process of making burgers is standardized and consistent. You will also have to ensure that you are making burgers as per the process to ensure consistency in quality.
Myth 3: Franchising Will Require Significant Upfront Capital
One of the biggest myths related to food franchising is that it requires upfront capital. However, it is not true in all cases. Like with any other business model, there are different costs involved in starting a food franchise business. One of the primary costs in starting a franchise business is the initial franchise fee, which varies based on the name of the franchise concept that you select and the franchisor. You will also have to spend on operational costs such as marketing, administration, and other operational expenses.
You will also need to put money in place for the initial investment required to start your business. Franchising is a long-term investment. Therefore, it is not recommended for short-term investors. If you are looking to enter into the world of business franchising, you have to assess your creditworthiness to determine the type of financing you can get. If you’re a starting entrepreneur, getting advice from a franchise consulting company would usually be the most helpful tip aside from doing your own research.
Myth 4: It Requires A Lot of Time to Manage
Many franchisee owners in the food industry believe that this kind of business model will take away all their free time. However, it is not true in all cases. Franchising does not automatically lead to more work. It will depend on how you manage your franchisee. If you are sincere about growing your franchise business and want to do it right, you will have to dedicate some time to managing your franchisees.
You will have to spend some time with your franchisees to understand their needs, and problems, and find ways to solve them. If you have a successful brand and are honest with your franchisees, you will have to spend time training, mentoring, and guiding them. However, if you are not serious about growing your franchise business, franchising will not take up a lot of your time.
Myth 5: Longer Period of ROI
Many people in the food industry believe that franchising will take longer for them to start seeing a profit. However, it is not true in all cases. As already mentioned, it all depends on the type of franchise you choose and the ability of the people who are working for you. If you are starting a new concept, it will take a longer time to get established and reach break-even.
However, if you franchise an existing brand, it will take less time to start generating profits. If you do proper research before picking a franchise concept and select a proven and scalable franchising business model, you will be able to start making profits even before you open your first outlet.
Myth 6: Tight Competition
Some entrepreneurs believe that food franchising is too competitive. This thinking is a misconception since it will all depend on the type of business you’re going to franchise. However, if you are franchising a new concept, it is the only time that there will be a strong likelihood that the competition will be tight.
As pointed out, if you are franchising an existing concept, the competition will not be as tough. In any business, there is a certain level of competition. It does not mean though that you will be making no money. Franchising an existing concept will give you a significant advantage over the competition.
Franchising your business can help you achieve accelerated growth and protect your brand from the competition. A well-planned and implemented food franchise strategy will help you bring in more revenue, lower operational costs, increase profit margins, and grow faster than operating as a standalone entity. If you are looking to franchise your business, you have to make sure that you are entering a profitable business model with an established track record. Before signing up for any deal, do your research and vet the franchisor to make sure that they are worth your investment.[ Image Source: Freepik ]