Most jobs, tax income and wealth come from high-growth corporations that begin with an ideal concept after which scale it. And relating to scaling, franchising is an more and more standard choice. The Worldwide Franchise Affiliation discovered that American franchises bought greater than $825 billion of products and companies in 2022 — a quantity that is solely anticipated to develop.

Collectively, the 2 of us have a long time of expertise working with client and franchise manufacturers and instructing it on the Tariq Farid Franchise Institute at Babson School, together with as co-hosts of the just lately launched Stars of Franchising podcast. We have seen firsthand how franchising affords a wonderful mannequin for corporations trying to develop and scale in addition to people in search of entrepreneurial alternatives to create financial and social worth.

But amongst college students, seasoned executives and everybody in between, we incessantly encounter myths about franchising — from the notion that franchises run themselves to the view that they do not supply room for creativity and innovation. Listed below are three frequent myths we encounter, plus our recommendation on why franchising could also be best for you.

Associated: Busting Franchising Myths and Selecting the Proper Alternative

Fable #1: Franchising can succeed on autopilot

A profitable franchise requires many various companions. Franchisors who create a model. Franchisees who work to develop that model. Bankers and traders who organize financing.

Franchising can pave the trail to development by way of a longtime model and operational mannequin. Opening a brand new retailer is less complicated when you may be taught from an organization’s playbook for fulfillment. However that does not imply you may sit again and the whole lot will probably be taken care of. Having a health plan that may yield outcomes is not the identical as really exercising.

A franchisee who opens a brand new retailer should navigate the whole lot from actual property web site choice and planning for launch to management, labor and provide chain administration as soon as it is up and working.

Just about each franchisee and franchisor we communicate to says that they wanted grit, resilience and an entrepreneurial mindset to succeed.

Soozie Lazenby, who owns and operates 4 StretchLab franchises within the Tampa Bay Metro Space, instructed us that “Franchises do not run themselves. There isn’t any such factor as a semi-absentee proprietor.” Equally, Neal Faulkner, who went from a single Dunkin’ Donuts retailer 23 years in the past to a number of areas and 500 workers right this moment, insists that “Franchisees should work within the enterprise and be able to do each single activity!”

Franchising is a wonderful alternative — however provided that you are prepared to do the work.

Fable #2: Franchising is not entrepreneurial

Folks usually image entrepreneurship as ranging from nothing and bringing an concept to life. Nevertheless it takes as a lot creativity to scale one thing that already exists.

Neal, the Dunkin’ Donuts franchisee, grew up on a farm in Kansas, which he describes as a extremely entrepreneurial atmosphere. Franchising supplied an identical demand to take possession of a variety of duties and be inventive in getting them executed. Opening a brand new Dunkin’ Donuts location regarded like opening a enterprise from scratch: Neal had to determine building, conduct financial institution negotiations, handle his workers and extra.

The notion that franchising is not entrepreneurial partly depends on a picture of franchising as a top-down mannequin. Nevertheless, many franchises are laboratories for experimentation that may then unfold to the remainder of the model. The McDonald’s Egg McMuffin, the Dunkin Donuts’ Munchkin and the Planet Health Black Card had been all merchandise that started on the particular person franchisee degree.

Franchising can supply the most effective of each worlds: the prospect to be entrepreneurial your self and to learn from others’ entrepreneurship. Babson School President and Jiffy Lube Worldwide co-founder Stephen Spinelli Jr. shared with us how when one Jiffy Lube franchisee found a inventive innovation, it may very well be distributed to all different shops inside 48 hours.

Amanda Bialek, an professional in franchise advertising, summarized it finest: “Franchising offers the chance to faucet into entrepreneurial spirit with the steering of an ideal playbook.”

Associated: Aspiring Entrepreneur? Think about Perfecting One thing That is Already Constructed

Fable #3: Franchises aren’t native and are not meant for sure folks or forms of companies

Some folks view a franchise as an extension of an enormous company. However lots of the time, franchise manufacturers are run by people from the group, your neighbors, who’re on the lookout for a path to possession and entrepreneurship. These domestically owned and operated franchisees then create jobs and social impression, producing group advantages.

Equally, there is a notion that franchising is a match for individuals who have collected a considerable quantity of capital and are on the lookout for a secure enterprise alternative. However right this moment’s wave of franchisees is youthful, they usually include contemporary concepts on staying in contact with new tendencies.

Edible Preparations is seeing a development of younger franchise homeowners who use Web-driven instruments to attach with prospects. Franchisors launching a brand new model may also be youthful. Cousins Jim Tselikis and Sabin Lomac joined collectively to discovered Cousins Maine Lobster in their late 20s and early 30s — and secured a 15% fairness funding from Barbara Corcoran on Shark Tank.

Simply as younger folks should not overlook franchising, neither ought to folks focused on companies exterior of the standard restaurant manufacturers akin to Panera or McDonald’s that folks usually consider as franchises. Whereas franchising is a wonderful mannequin for the meals business, many different companies, from gyms to pressing care facilities to automobile dealerships, have discovered success within the franchise mannequin.

The massive message: Franchising is much extra native and expansive — by way of who entrepreneurs are and the forms of companies they function — than you would possibly count on.

Associated: Is Franchising Proper for You? Right here Are 4 Inquiries to Assist You Determine.

Franchising could also be best for you

Franchising offers the chance to leverage a confirmed model or service to attain outcomes. It affords the prospect to be entrepreneurial. It affords room for development — multi-unit franchisees now account for many franchise models in the USA. And regardless of perceptions, many sorts of individuals and forms of companies can embrace franchising.

Whether or not franchising is best for you is determined by your objectives and aims and the standard of the franchisor. It doesn’t matter what, success in franchising requires grit, management and an entrepreneurial mindset. With these in hand, franchising can supply a resilient path to financial success.