by Rudolf A. Kotek
A generic use of the word “business opportunity” may be applied to describe a franchise, but generic or otherwise the definition of the word “franchise” cannot be applied to describe a “business opportunity”.
There are success stories in non-franchised opportunities as well. The limited non-franchise businesses that succeed are owned by “types” that I have classified into just two groups. The first group consists of genius inventors of excellent and unique products or services that hire first class salesmen. The second group consists of extraordinary hard-working people willing and able to do everything by themselves.
The word success has two basic meanings: one — satisfactory completion of something, and, two — the gaining of wealth and fame. People are attracted to franchising primarily because of the published fail-safe of franchising. They were not foolish enough to trade their savings and their ego just to open their own business. The glowing reports of franchise success, being in business for yourself, but not by yourself offers a chance to financial success.
In contrast, there are many people who have the same objectives and expectations of owning their own business, but shun franchising. This is the group which takes a dim view of accepting, needing or wanting anyone’s help to succeed. They are not familiar with the infrastructure of franchising and they usually don’t care to learn. They perceive franchise fees, royalties, control and restrictions to be unreasonable, costly impositions. According to them, they can and do succeed, by both meanings, totally on their own without the benefits of franchising. They exist in extremely small numbers, as noted in the high failure rate of non-franchising business.
Generally, the prospect, in his enthusiasm, has been open to the glowing reports of franchise success as reported by the media. He sees the advertising of hundreds of well-known franchises and assumes that all of these costly promotions are free. These self-preconceived notions, along with many other misinterpretations, often lead him to assume amenities that simply do not exist even though they were never offered by the Franchisor. And, these expectations are the root of the problem that breeds bad feelings between a few Franchisors and Franchisees.
Ambitious reporters and attorneys who are unfamiliar with the franchise selling process fuel the distorted allegations that evolve from this dilemma. The real confusion arises when the franchise is not a real franchise but actually a “business opportunity”. The business opportunity is often mistaken for a franchise because the difference is not known or understood.
Investors, who desire to be in business for themselves, usually perceive themselves as entrepreneurs. No Franchisee is an entrepreneur, but most fancy themselves as such. Entrepreneur is another word that needs further illustration, particularly in the world of franchise investments.
