Inspecting the Common Myths of Franchising
Monday, April 24, 2006 Bound Brook, New Jersey As the housing market cools, opportunities in related businesses, such as the home inspection industry, often thrive. In fact, HouseMaster® offices from Louisiana to Virginia to Oklahoma to Wisconsin are reporting that March 2006 was their best month to date. And buying a franchise in such a field is a wise investment, despite recent claims in Fortune Small Business magazine - but only if a buyer understands the ins and outs of the relationship between franchisor and owner.
While the magazine claimed, "As risky as starting an independent business is, buying a franchise is an even bigger roll of the dice". (In) reality, you’re just leasing a trademark, and the real boss is the company that has sold you the privilege." The experts at HouseMaster, the oldest and most experienced name in home inspections, refute that assertion.
"Buying a franchise is a major investment and a long-term commitment - and it is simply not right for everyone," says Kathleen Kuhn, president and CEO of HouseMaster, the first company to sell franchises in the home inspection field nearly thirty years ago. "Our history has shown that prospects who fully understand the franchise business model before they opt to buy are far more likely to succeed than those with unrealistic expectations."
With that in mind, Kuhn dispels some of the common myths surrounding franchising:
• MYTH #1: BUYING A FRANCHISE GUARANTEES SUCCESS. There are no guarantees in business. Being a successful franchise owner involves time, energy, commitment, and a willingness to be a part of the system. It involves paying for an existing business model - one that includes approved marketing materials, top-notch software systems, insurance and other operational systems—and is often an attractive option when considering the time and money it would take to orchestrate all these elements alone.
• MYTH #2: OWNING A FRANCHISE MEANS BEING YOUR OWN BOSS. This is not exactly true. While a franchise owner controls the day-to-day operation of a business, he is also required to follow the franchisor’s operating system - which could include designated hours of operation, the use of specific equipment or materials to operate the franchise, or franchisor-approved marketing and/or sales materials.
• MYTH #3: A FRANCHISE WILL MAKE LOTS OF MONEY FAST. Franchises have a very successful track record when compared to non-franchise start ups, but it takes time and money to make money. Like any small business, undercapitalization is the number one cause of failure. It may take a significant amount of time before a franchisee realizes a return on his investment.
• MYTH #4: BUYING A FRANCHISE IS RIGHT FOR A CREATIVE SOUL WHO HAS DIFFICULTY WORKING FOR OTHERS. Actually these are qualities that are not good for a prospective franchise owner. Franchisees follow established methods and are not encouraged to "re-invent" the wheel.
• MYTH #5: OWNING A FRANCHISE WILL BE STRESS-FREE! In any franchise system, a franchisee will be held accountable for his results. The best candidate for a franchise is someone who is interested in reaping the benefits of hard work, but values the added coaching and accountability of a franchise system.
• MYTH #6: BUYING A FRANCHISE MEANS NO MORE DEALING WITH EMPLOYEES. Very few franchise concepts are true one man operations. Successful franchise owners generally have a strong back ground in marketing and management and use those skills to develop a quality team to grow their local franchise and potentially grow into a multi-unit operator.
These are just a few of the misconceptions that surround the franchise industry. Like many franchisors, HouseMaster (HMA Franchise Systems, Inc.) strives to find professionals that are best suited to develop a successful service business that does not require expensive retail space and involves a relatively small capital investment.
"Running a home inspection franchise is not for everyone. But for someone who has the necessary capital, business acumen, motivation and thrives in a positive team environment, the results can be gratifying for all," Kuhn concludes.
About HouseMaster HouseMaster has franchises in more than 350 cities in North America. Each franchise is an independently owned and operated business. Collectively, HouseMaster has performed nearly 2 million inspections since 1979. For more information about home selling and inspection, visit www.housemaster.com or call 800.526.3939.
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