The Downside to Owning a Franchise

The Downside to Owning a FranchiseFranchise opportunities exist all over the worldtoday. In fact, franchises are essentially whatthe whole world is made up of if one is to trulythink about all the different opportunities thatexist. Considering the fact that one companyalone probably has thousands of franchisesalready located in the United States and aroundthe world, it is definitely safe to say that over5 to 10 million franchise outlets existthroughout many parts and corners of the world!There are definitely advantages to owning yourown franchise of a company because it is

essentially like owning a smaller portion of thecompany itself. Franchise owners get to keep mostof the profits that come into their business inexchange for usually a modest royalty fee of theirprofits that get sent back to the companyheadquarters.On the other hand, though, there can be somedownsides to owning a franchise. The firstdownside to owning your own franchise is that youwon't actually own your own company even thoughyou'll own your own store or other companylocation! Many people have the desire to actuallyopen up their own store and create a company allby themselves, but owning a franchise is not whatthat's all about.In fact, you are essentially paying for acopyright allowance to be able to use thereputation of the company that you're working for!Indeed, by owning a franchise you are essentiallyworking for that company. Why else does

McDonald's or Burger King require part of theprofits from your franchise? A franchisee owneris essentially working their franchise locationin order to send more profits back to the companyheadquarters, even though that's not the way thatmany would like to think about it.Another downside to owning a franchise, though,could possibly be the contract that you've lockedyourself into. Considering the fact that theaverage contract length for a franchise storeowner is usually 15 to 20 years at the onset itwould truly make it difficult to get out of if afranchise owner was having trouble getting thepopularity of the franchise store off of theground in the first place. Furthermore, there mayactually be hefty breach of contract fees as wellif, in fact, your franchise doesn't do as well asprojected and fails within the first few years!The help and resources that a franchise ownermight receive from the company may not be worth

everything that is paid to the companyheadquarters as well! Many company headquartersactually have giant startup fees, annual fees,and royalties that must be shared with them, butif the franchise store owner is not able to getadequate help or training then the wholeopportunity may be lost in the first place.Considering all of these things before going downthe road of opening up your own franchise is veryimportant. Not only is it important to make sureyou understand all the implications of owning afranchise, but making sure one understands thetotal commitment is also important!