3 Franchise Risks to Know Before Making an Investment

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Franchise Risks to Know Before Making an Investment

Understanding the risks of buying a franchise can help you be a more informed franchisee. AtWork can help you learn more about franchise risk and franchise risk management.

History is packed with successful entrepreneurs who had the drive, ambition, and vision to achieve their business goals. Sam Walton’s low prices and innovative supply chain strategies made Walmart a household name. Charles Schwab built his empire by making financial services accessible to the masses. Jack Dorsey debuted a new form of online communication when he co-founded Twitter in 2006. Armed with entrepreneurial spirit and bright ideas, these pioneers charted a new course to achieve self-sufficiency.

Yet, launching a business is inherently risky. There’s a risk of insufficient capital, cash flow problems, or the inability to secure funding, which can lead to financial challenges or even business failure.

Aside from financing, there’s always a chance the market might not respond favorably to the product or service you’re offering. Issues managing production, supply chain challenges, equipment failure, and staffing problems may occur. Despite the strength of the small business community, nearly 52% of all startups don’t last past the five-year mark, according to the U.S. Bureau of Labor Statistics.

A Safer Path to Business Ownership
If you strive to pursue entrepreneurship, opening a franchise is less risky than starting a business from scratch. You get to take charge of a proven business model with a track record of success. A franchise is a turnkey business with training, ongoing franchise support, and marketing guidance. The International Franchise Association forecasts there will be 805,000 franchises in the U.S. by the end of the year.

Despite having a system of owners to share best practices and offer advice, the franchise business model only partially eliminates risk. Here are some of the top franchise risks:

  1. Initial investment. Franchisees must pay an upfront investment, including a franchise fee to gain access to the brand. You’ll also be responsible for paying ongoing royalty and advertising fees as part of the franchise agreement.
  2. Control. Franchise owners manage day-to-day operations at their business, but they also adhere to the guidelines and standards of the franchisor, which may limit their ability to make independent decisions.
  3. Brand reputation. The reputation of your franchise can be influenced by the overall brand reputation and the actions of other franchisees.


AtWork’s Risk-Reduction Strategies
AtWork takes steps to help mitigate risks and gives you the tools to run a rewarding business. We’re one of the fastest-growing staffing franchises in the country, and we have 30 years of experience helping entrepreneurs put people to work in local communities. We give franchisees the systems, training, and support they need to do business.

Accounting services. We offer a significant value proposition by taking care of payroll for our franchisees. We cover processing, invoicing, funding, client payment processing, garnishment management, tax filing, and payments. Taking care of accounting gives franchisees more hours in the day to build their business.

Comprehensive training: We provide initial training to help you understand the business operations, services, and brand standards. AtWork offers a mixture of classroom, online and in-person field training to new franchise owners. We also offer ongoing support, such as regular training updates, operational assistance, and access to a support network.

Operational playbook: Like other franchisors, AtWork offers operational guidelines and manuals that outline the standard procedures, quality control measures, and best practices to maintain consistency across franchise locations. Following our guidelines helps minimize operational risks and ensures a unified client experience.

Marketing program: AtWork has a national marketing fund to promote the brand and a system in place to assist franchise owners with local advertising to help generate leads.

Get Started with AtWork
AtWork is a low-risk, high-reward opportunity for entrepreneurs who want to help the people and businesses in their community. Get started to learn more about an industry with consistent, year-over-year growth.


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