10 Common Franchise Myths | Franchise Awareness
#FranchiseAwareness | Canadian Franchise Association

10 Common Franchise Myths

Myth: Franchises are limited to fast food
Fact: Any business that can be exactly replicated in a new location can grow using the franchise business model. 60% of franchises in Canada are in non-food sectors and CFA members can be found in over 50 different industries

Myth: Franchising is all big business
Fact: Franchisees are small business owners who have invested in and support their local communities, even though their franchise system may be national or international in scope.

Myth: A franchise is guaranteed to make money
Fact: Franchisees benefit from a proven business model and franchisor support, but they still must work hard to make their location a success.

Myth: Franchisors will accept anyone who shows up with a cheque as a franchisee
Fact: Franchisors want to ensure the continued success of their system by bringing the right people on board as franchisees.

Myth: Franchisees are essentially employees of franchisors
Fact: Franchisees are small business owners who are responsible for the daily operations, decisions, employee hiring and management, and, ultimately, the success of their business.

Myth: The franchisor will do everything for the franchisee
Fact: Franchisors offer training and support but like any small business owner, the franchisee is responsible for driving revenue and profitability and the day-to-day operation of the business.

Myth: Investing in a franchise means buying a business
Fact: When a franchisee invests in a franchise, he or she receives the license to operate a business under the brand name of the franchise system, including associated trademarks and operating processes, for a specified period of time.

Myth: I don’t need to hire a franchise lawyer
Fact: Prospective franchisees should consult a franchise lawyer to ensure all legally required information has been disclosed and to assist in fully understanding all the documentation involved in the franchise investment process.

Myth: It’s more expensive to invest in a franchise than to start an independent business
Fact: While you might pay more to purchase a franchise license, you should see a return on your investment from the brand recognition, assistance and marketing support a well-established franchise can offer.

Myth: If it doesn’t work out, I can just walk away and get my money back
Fact: The franchise agreement should outline how, when and why the partnership may be terminated but it’s unlikely that the franchisee can walk away with his or her money. The franchisee needs to fully understand the obligations of the franchisor, as well as their own responsibilities, as outlined in the agreement.