While franchising may seem like a highly viable option as far as startups go, this high-impact low-risk opportunity has been shrouded with many myths. Myths that have held back even the most daring of entrepreneurs. In this article, we try and break some of the myths that surround franchising.

The first predominant myth that is doing the rounds is – ‘The more money you spend the more you’re going to get’. Unfortunately, while this may hold good for most of the commercial products we purchase, it need not hold true for franchising. In franchising, what counts is to spend your money smartly. By that we mean, spending minimal amounts intelligently with a calculated approach. That will ensure you not only get your returns but probably much more than what you’d hoped for! A classic example is the consulting business where the amount of investment required would be substantially lesser as compared to a standard shop offering a particular product. While the associated costs are far lesser, the returns could turn out to be far more and much more profitable in the long term. Another example could be of a pizza chain. While each of the individual outlets would have cost the same to set them up, some of them perform better than the others. Therefore, the conclusion is that in the world of franchising, there is no direct correlation between the money invested and the profit gained.

Another myth is that only food chains turn out to be successful franchises. That’s not true. There are millions of business opportunities that could be franchised. Take the example of consulting services. There are probably more guaranteed returns in a consulting opportunity than a restaurant chain.

The third myth is that there are limited finance options like SBA. Once again that’s not true. There are many other finance options doing the rounds such as home equity loans, a government approved IRA rollover program or even an ERSOP.

The best way to go about setting up a franchise is to separate the myths from the facts. That’s the only way to get clarity on the market landscape and stay clear of misconceptions.