Despite FDY’s years of running a food management company, it quickly became clear that running a franchise is different. Young and his management team called all the shots at FDY, but that wasn’t the case with Bojangles. If you’re used to doing your own thing, you might not be able to do what you want under a franchise agreement, Haywood says. Not only must franchise owners conform to certain rules and standards such as hours of operation and product preparation, but if they fail to do so, “You can breach the agreement with the franchisor.” However, certain decisions, such as pricing and hiring, can be left to a franchisee. “If you’re trading another entrepreneurial effort for a franchise, it can be a culture shock,” says Haywood.
Entrepreneurs often don’t know what franchise ownership entails, says Robert Purvin, chairman and founder of the American Association of Franchisees and Dealers and author of The Franchise Fraud: How to Protect Yourself Before and After You Invest (John Wiley & Sons; $18.99).
“The conventional wisdom about franchising and the reality in many ways do not line up,” he says. The best way to separate truth from fiction is to educate yourself. Begin by learning about these five common franchising myths.
1. You Can’t Afford It
After a corporate career in human resources, sales, and marketing at companies such as John Deere and Stanley Tools North America, Ron Norsworthy wanted to buy a franchise with minimum startup investment. Home Helpers, which provides in-home caregiving services, caught his attention. Impressed by the business model and the ability to buy the rights to the Sugar Land, Texas, territory for $13,500 (now about $49,000), Norsworthy used his own savings to open for business in 2003. But it also impressed him that the franchisor offered financing.
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