Using Bad Numbers And Logic To Sell A Franchise

BlueMauMau.org:

There are good reasons to buy a franchise. But peddling myth and faux numbers do not help the industry. It turns off a lot of thoughtful business people from looking further. Take a look at what Rachel Elnaugh in The Franchise Magazine of Britain writes:

“A little known fact is that most new start-ups take a good two years to come into profit… Franchise owners on the other hand frequently find themselves making money after only a month or two of opening.”

That statement is full of errors. In the author’s defense, it is possible of the thousands that start a franchise in the United Kingdom that if there were just three that find themselves “making money” after a month or two, that would technically qualify as “frequent”, wouldn’t it?

“Making money” connotes earning a profit. It might also mean to break-even, the point in which sales cover fixed costs. But most new franchises do not break-even within a month or two. That’s false thinking. Here are some possibilities of what is meant when a salesman talks about you “making money” in the first couple of months of your franchise business.

* Some pioneer customer will discover your business and start giving money in exchange for goods and services within the first couple of months. You “make money”.

* It is not a description of what will happen but rather a command. If you are the first to make money in two months, she can use that as a selling point with all other prospects. She is trying subliminal hypnosis - “Repeat after me, you will make money in the first two months.”

* Franchise owners have a printing press that cranks out money in the back. It may take a month or two of trial and error to set it up as per the instructions in the franchise operations manual so that the money looks really authentic.

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