Why Franchising is NOT Turnkey

 

Have you been looking into franchise opportunities and been lured by promises of turnkey businesses? We’ve seen that term time and time again, making it seem like franchising is the easiest path to business ownership.

Unfortunately, it’s often far from the truth. One of our favorite Franchise Risers, Angela Coté, is back on the show to bust that common franchising myth – that franchises are turnkey businesses.

Sure, it’s often more simple than starting a business from scratch, but there is so much more to it.

Myth #1: You Open the Doors, and Customers Come

One of the biggest myths about franchises being a turnkey business is that a franchisee is going to walk into her business, turn on the open sign or make the announcement on social media, and business is just comes.

It doesn’t work that way.

Franchise ownership really does require long hours and hard work and franchisees must have hard work and that grit. Just because it’s a franchise doesn’t mean it’s going to be easy, even if you buy into a well-known brand.

Of course, there are supports and systems in place to help bring customers, so if you follow those systems and processes, you have the greatest chance for success. Even with those supports in place, opening a new business often requires long hours and hard work. You are the business owner and you need to take ownership for building your business up.

Specifically, franchise owners need to have marketing dialed in. The details of how to do this successfully should come from your franchisor. Ask them:

• What does it take to go from your initial start point to the point where you’re attracting regular business?
• What do I need to know to get the business up and running?
• What do you have to offer for marketing supports and systems?
• How much of my budget should go toward marketing?
• What kind of technology is in place to help ensure I’m maximizing productivity?
• What kind of ongoing training is provided? How frequently?

All of these supports are in place, but at the end of the day, it is your business. And to be successful, you need to put in the work.

Myth #2: The Franchise Fee is Your Only Monetary Investment

If you’ve explored franchise ownership, one of the first things you’ve probably looked into is the franchise fee. If you’re considering a bricks and mortar business, you may have also considered construction costs.

But, that’s not the end of your investment.

Something that often gets missed is initial working capital. If you aren’t set up to have the right initial working capital, your business could fail early on since you may not be able to afford to keep the business running.

Again, you should ask the franchisor how much initial working capital is needed. Others to ask are current and former franchise owners, who you can speak with during validation. Angela suggests running numbers by them and asking if they think that’s enough to get the business up and running.

Myth #3: Your Franchise Will Become Turnkey Once it’s Established

Now you know hard work is required in the early stages of franchise ownership, but what about once things get up and running? Can your business run on autopilot then?

The answer is still (usually) no.

Angela compares it to motherhood. When her firstborn finally started sleeping through the night, she remembers thinking “Oh, sweet. Now everything is good! He sleeps through the night now and we’re good to go.”

But a few months later he got a cold. The whole pattern was thrown off, and it was a while before he started sleeping through the night again.

This is a lot like franchise ownership.

She remembers thinking she’d be able to take a step back once her franchise started being profitable. In reality, it often doesn’t work like that.

Of course, there are some ways you can step back, but it’s often more beneficial to stay actively involved. One of the main reasons for this is because of the importance of your presence in your local community. You have to be present to make connections and continue bringing in business.

Franchising can be an amazing path to business ownership, but it’s important you go into it with your eyes wide open. That’s why we’re trying to bust the myth about franchising being turnkey – because it comes down to having very realistic expectations from the start about what it takes to be successful.