---
title: Is Franchising a Scam? | Franchise Sidekick
description: Is franchising a scam? Or is it one of the most misunderstood paths to business ownership? We break it all down in this episode.
---

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# [Is Franchising a Scam? | Franchise Sidekick](https://www.franchisesidekick.com/resources/podcasts/epsiode-21)

 Written by [Tyler Altenhofen | Ryan Zink](https://www.franchisesidekick.com/resources/podcasts/author/ryan-zink-tyler-altenhofen) | Jun 24, 2025 5:00:00 AM

 

 

## Is franchising a scam?

If you’ve seen the ads for Franchise Sidekick online, chances are you’ve also seen the spicy comments:

“Franchising is a scam!”  
“You’re throwing money down the toilet!”  
“Do it yourself, F off!”

In this episode of "The Sidekick Life," hosts Ryan Zink and Tyler Altenhofen take on the hate and the misconceptions behind it head-on. So, is franchising actually a scam? Or are people just misinformed about what franchising really is and how it works?

Let’s unpack the facts.

 

## Why franchising gets a bad rap

The loudest critics usually know someone who “tried” franchising and failed. But here’s the reality: failure happens in *all* types of businesses. Just because one franchisee didn’t succeed doesn’t mean the model is broken. In fact, the system often works, when used correctly.

 

## Independent vs. franchise business failure rates

The Bureau of Labor Statistics tells us:

- **20%** of new small businesses fail in their first year
- **50%** fail within five years
  
  Franchising, on the other hand, performs significantly better.
- **Franchise SBA loans default 30% less** than non-franchise loans
- **FranData** reports that **85% of franchise locations are still open after five years****  
  **
-  
- Those numbers paint a very different picture from the internet hate.

 

## Misinformation is the real problem

Ryan and Tyler point out that most people don’t fail at franchising, they fail because they chose the wrong franchise or walked in with the *wrong* expectations. Too many buyers are talking to salespeople, not experts. And that’s why Franchise Sidekick exists – to bridge the information gap and set people up for success.

 

## “You’re just buying a job”

This is half-true. If you only open one location and operate it daily, it *can* feel like a job. But franchising is designed to scale. The most successful owners build systems, open multiple units, and eventually step out of the day-to-day. That’s when the business becomes an *asset – *not just a job.

 

## Time vs. money: What are you really buying?

Can you start your own business from scratch? Sure.

Can you build the brand recognition, systems, technology, marketing engine, and support structure a great franchise provides? Probably not in under 5-10 years.

That’s what the franchise fee is buying you: time. Time saved from having to build it all yourself.

 

## Built-in community and scale

When you join a franchise, you also join a network of other owners, people who are incentivized to help each other, not compete. That’s a built-in mastermind that solo entrepreneurs don’t get.

 

## Final verdict: No, franchising isn’t a scam

But it may* *feel like this true if:

1. You choose the wrong brand  
2. You enter without understanding the commitment  
3. You don't leverage the tools, people and playbook provided

Franchising is not foolproof, but it *is* one of the most scalable paths to entrepreneurship when done right.

<https://www.franchisesidekick.com/hs/cta/wi/redirect?encryptedPayload=AVxigLJhO6FgY45UUtpX74YuVXOhdWv6TEuPdUt%2Fw0IXqy3rRD3Z2J9RBJmmq86iazZtZY1ZiKZLSYxUUnrJ3rVdlM4rj7g%2FN1e0TDMKs9Roqbj3eupPdIgPVofQFybhpMBXgdRqTKFJoxkhl1Z5tK%2BoLmAXJ5oG5x3Y8mXncBjle%2FZTIDoTq5X9O0Wb1x6HHprP1noJPmkBEV2J8TnnOpOe&webInteractiveContentId=186701235618&portalId=21052030>

[View full post](https://www.franchisesidekick.com/resources/podcasts/epsiode-21)

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