There is no free franchise as ‘there is no free breakfast’. A free franchise is a marketing move by a franchisor company to quickly conclude a franchise purchase agreement with novice entrepreneurs and to attract inexperienced, gullible customers to expand the marketing network of retail outlets to distribute and promote the franchiser's trademark. Created new small businesses that decided to start their entrepreneurial activity with franchise biz and do not have start-up capital, ‘fall for this bait’, without looking and do not really read the content of the franchise agreement, sign it thinking that they are incredibly lucky, a large preference and discount are provided, thereby ‘laying in’ a ‘bait’ placed in advance. When concluding a contract with a free franchise, they imply the absence of a lump-sum payment, which at first glance, for emotional sensations and delight, looks like a very tempting offer. However, in practice, this does not happen, because every franchisor will refuse to lose fixed money on the cost of the franchise. The ‘trick’ of the marketing model and the trade ‘trick’ is that the lump sum is initially transferred to the purchase price of the total amount of the wholesale product or per-unit price of the product, which can significantly exceed the market price, working according to the principle, figuratively speaking, according to the ‘law of communicating vessels’, departed in one place, arrived in another.
Also, the franchisor can, according to the obligations of the signed contract, ‘bind’ the entrepreneur-franchisee, purchase goods, and products only from the franchisor, using the clauses and provisions of the concluded contractual requirements, not violate the terms of the legalized contract. The franchisor can also use a commercial maneuver, using tricks and ignorance of the entrepreneur in the hidden form of a free franchise, we offer him a small increase in the percentage of royalties and advertising fees, from the money turnover of the proceeds of the franchise enterprise, abandoning a fixed amount, which, when the volume of sales, can significantly increase the number of deductions. Summarizing the concept, a free franchise, the well-known Russian saying ‘free cheese only happens in a mousetrap’ comes to mind. Business representatives should not flatter themselves and ‘rush headlong’ to agree with the provision of a free franchise. It is necessary to carefully study all the nuances of starting, developing purchased franchise biz and effective usage of the franchise owner's trade brand, its technology, and established business standards. By the initial stage of establishing franchise biz, you need to learn the elementary basics of doing biz, serious technical training, and at least a small start-up capital. You need to be aware that the franchisor company is not engaged in charitable activities, offering a well-prepared or completed business model, consulting, providing other ‘bling’, and start your own business is not free.
The absence of a franchise, a lump-sum fee, or royalty in the agreement does not give the right for novice small business representatives who want to have their own business, no matter what the lucrative offer for a free franchise is, to rush ‘not remembering themselves for joy’ to sign a franchise acquisition agreement. For the sustainable development of a business, careful and systematic organizational preparation is necessary, and for a beginner franchisee businessman, it is imperative to know the brand that he is offered, thoroughly research and analyze the franchisor company offering business and trade cooperation.