It’s no secret that franchise opportunities can be a great business opportunity. Certain franchises like McDonald’s has a great track record, meaning if you are awarded a franchise, you have an excellent chance of making a nice profit. McDonald’s the corporation researches the demographics and will advise you on the location where you have a great chance of success.
Some uplines pitch Amway as a form of a franchise, I suppose to pretend that an IBO has a chance of success because they will follow sone model of business that upline designs. The IBOs are basically taught the same things but the Amway opportunity is far from a traditional business using the franchise model.
Upline does no research into demographics. They would sign up everyone in your neighborhood if they were willing but that would be like opening up a dozen or more McDonald’s locations in the same neighborhood. That’s a design for failure. The IBOs are constantly competing with each other for potential down line recruits as well and any possible customers, if any.
Sone upline even call the business a private franchise which is just a slick way to push Amway on people. Another huge difference is that many conventional franchises have a good record of success for franchises. Whereas the vast majority of of Amway IBOs make nothing or lose money if they are participating in the tools and functions. It is the tools and functions that generally become the demise of most active IBOs financially. It systematically drains resources from the rank and file.
Prospects and information seekers, beware of the term franchise if being pitched Amway. Ask tough questions and demand real answers. Anything less and you should turn the other way and run!
2 comments:
Being an Amway IBO isn't having a "franchise." If the Amway subsystems are telling recruits that, it's a complete lie. But all of those AMO subsystems (WWDB, URA, BWW, Network, etc.) are nothing but lie factories.
By seeking out people in your immediate vicinity to sign up into your Amway down-line, you are actually making it harder for anyone in your area to be successful. An IBO is expected to recruit more IBOs regularly, so several IBOs in a restricted area will be in perpetual competition with each other for customers and new recruits. This is already a problem in some places, where there is vicious anger between cross-lines over recruiting and selling.
In a real franchise, you have a certain area that belongs to you alone, just as salesmen have special territories that are assigned to them by their company. McDonald's isn't going to put up another McDonald's across the street from your place, and you aren't going to be trying to sign up your friends to get McDonald's franchises. If you have a Pepperidge Farm bread route, a certain area or neighborhood in the city is set aside exclusively for you. In a genuine franchise, you actually are an "Independent Business Owner," working exclusively for yourself, in a protected area.
In Amway (no matter how they disguise it) you're nothing but a salesman working on very low commission, and your only hope is to convince a lot of other dopes to do the same thing. You're in competition with every other cross-line Amway IBO, and you're even in competition with IBOs in your up-line! They're looking for new down-line legs too, and will try hard to take away prospects from you.
Most franchise branches succeed. McDonalds wouldn’t have it if even a quarter of McDonalds stores failed.
A franchise typically requires an investment up front, that gets paid off (out of the running profits), but to do that, it actually makes money almost from day one. It has to. Quite ironic given that business wisdom taught in Amway is that all businesses take years and years before making money. Not really the case “out there”. It may be true for a mega enterprise like Amazon, but it is generally not true for owner managed businesses. The point of a franchise is that it makes money from day one. For a business run from home, with no rent to pay, no employee wages, so much more so.
A franchise won’t let you open a store in a crowded offering environment. If they let you open an outlet, the owner can be sure that the brand owner has 90% or more confidence that it will work, based on their assessment of your traits, and the demand in the area. What is more, they won’t let someone else open one afterwards, too close to you.
The irony is that with a “traditional” franchise, if you pass the vetting process, odds are overwhelmingly in your favor, that you will succeed. That is why no McDonalds owners have another day job. If there is a “franchise” opportunity where almost all who take it up don’t quit their day jobs just yet, it should be the sign to run away. Because clearly that is a lousy opportunity, with a low probability of working.
A “traditional” franchise is also less risky. When owners realise it’s not for them, in the majority of cases it is sold, with investments recouped and money to spare.
There is another big difference. People who own franchises associate themselves openly with the brand. A friend of mine owns a tyre franchise. When you see him he wears the t-shirt and the cap. He writes with the pens. When you ask him what he does, he mentions the brand first, even before mentioning that he happens to own the business he works for, if he does at all. He is proud of the brand and would never hide it. Just imagine that with Amway. Instead it’s all this cryptic business owner working with a group of “successful” business owners stuff. If you confront them early on with the A word, they will take down the importance of it, ignore it, or may even deny it. What a difference!
If you approach an established franchise brand company, and they give an indication they are happy to let you open a branch in an agreed spot, and you subsequently approach the bank for a loan with the that indication in writing, odds are in your favor. Imagine taking the Amway “plan” to a bank, saying you want to quit your day job, and want to borrow money to support yourself while building the business full time, and for training and functions.
No it is not a conspiracy because banks are jealous of your Amway success. Banks WANT to lend money to people who can convince them that they will likely be able to repay them with interest.
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