Busting common franchising myths

imgIt is said that franchising increases a business’ success rate by 80% or more, as it is cemented on the learning and triumphs of other business pioneers, making it an ideal option for the entrepreneur looking for a smart investment. The concept of franchising is not a new one, and countless information sources are available to share more on the perks and the challenges that can be expected from this industry. Unfortunately, there are also many misconceptions on franchising that have caused even the most business savvy individual to rethink this business model. Newly appointed Managing Executive of The Fish & Chip Co, Jan de Beer, discusses the common franchising myths and how these can be busted, below.

Myth 1: Once I have signed the contract I can simply hand over the reins to the store manager.

This is a common misconception in any business. The fact of the matter is, even though you have the best managerial team, your business will never achieve optimal success if you are not hands-on. In franchising it is imperative to keep a close eye on the pulse of the business to ensure that it is kept on the right track at all times. Issues such as a lack of stock control, poor stock purchasing and a non-adherence to recipes are but some of the things that can have a devastating effect on the business’ bottom line, especially in fast food establishments such as The Fish & Chip Co. Aside from managing issues more effectively, by being hands-on the presence of a business owner will ensure better relationships in store – not only with staff but also with customers. A loyal relationship with a customer can only be cemented if the owner is the focal point of the business, as the owner’s presence will enhance familiarity and in turn, trust. When faced with this myth it is important to ask: does your manager really grasp the weight of your investment and are they really fully committed to doing everything in their power to ensure your company’s success?

Myth 2: The franchisor will dictate how my business should be run.

Yes, the concept of franchising involves the franchisor (or franchise owner) lending his trademark or trade name and a business system to the franchisee at a fee, with the franchisee paying a royalty fee for the right to do business under the franchisor’s name and system. That is the crux of franchising. This, however, does not mean that the franchisee will have no say or leeway in the business to make his or her own decisions. Yes, the franchisor has the final say over standard operating procedures in the franchise and elements that affect their best practice. Yet even with the guidelines for managing the business in place, the franchisor does not dictate to the franchisee how a store should be run, which staff to appoint, when to do stock take, how to manage income or how to deal with complaints. These are all issues that the franchisee needs to deal with and manage. At the end of the day, success in any business cannot be achieved without the business owner taking responsibility for their own actions.

Myth 3: Customers love the brand and will therefore always support my business.

A constant customer base is never a guarantee – not in any business. It is definitely a benefit that the franchisee has bought into a brand that is well known in general, however, the reputation of the brand is not enough to ensure a constant flow of customers. Managing the store effectively is the responsibility of the franchisee. If the products and services delivered are of a poor quality, customers will not support the store. It’s as simple as that. Franchisees also need to understand that there will be slower periods in the month and year, which they need to be prepared for. This is done best by putting money aside in the peak times when business is booming for the times when customer turnover is low. At The Fish & Chip Co. for instance, stores along the coastal regions receive higher customer volumes in the festive season, whereas those in the CBDs aren’t quite as popular during the same timeframe. This is therefore a trend that store owners in these areas need to be mindful of and prepare for.


It is no myth that franchising has its challenges. Even with tried and tested plans in place, there are no guarantees of success. Yet when a franchisee is informed of the facts and know which myths to disregard, the chances of steering the business effectively are much more prevalent.

Opinion piece shared by PR Worx.

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