Do you happen to be one of many who has dreamt about going into business for yourself but couldn’t put your finger on what kind of business to start? Perhaps you have an idea of what kind of business to start but fear has got in the way of taking the plunge. A degree of fear and trepidation are understandable, and maybe even a good thing, in the sense that they translate into being ultra-careful and not impetuous. In other words, becoming a business owner should not be taken lightly.
You might have many reasons for delaying the pursuit of your dream business, and you might have already analyzed your options. But have you ever considered owning and operating a franchise? Operating a franchise can give you a leg up toward being a business owner. The following information will shed light on why you should give the franchise option some serious consideration.
As noted by Market Watch, a franchise is basically a “business in a box.” It's a model for the operation of a business that has proven successful. This proven model includes the investment costs, a manual, and built-in support from the franchiser as well as a network of other franchisees who have experienced most of the challenges you will face while operating this business. The most attractive feature of buying a franchise, at least from the buyer's point of view, is simple: you can investigate purchasing a franchise more easily than purchasing a stand-alone non-franchised business.
Here are some additional advantages that go with buying a franchise, as stated by Entrepreneur:
- Track Record of Success. Any good franchise company has developed a method of doing business that works well and produces successful results.
- Strong Brand. One of the biggest advantages of franchising is that the company is building a brand on a regional or national basis that should have value in the eyes of customers you're trying to attract.
- Training Programs. A good franchise company has training programs designed to bring you up to speed on the most successful methods to run the business.
- Ongoing Operational Support. Franchise companies have staff dedicated to providing ongoing assistance to franchisees.
- Marketing Assistance. The franchise company has marketing assistance to provide you with proven tools and strategies for attracting and retaining customers.
- Real Estate Assistance. Most franchises have manuals and other documentation, as well as staff, to help you find the right site and negotiate the best possible deal on your site.
- Construction Assistance. Franchise companies can also provide a wonderful benefit in helping you design the layout of the business and select the right contractors to do your build out.
- Purchasing Power. A good franchise can take advantage of the buying power of the entire system to negotiate prices for everything you need at significantly lower levels than you could achieve as an independent operator.
- Risk Avoidance. The biggest reason to buy a franchise is that, if you're smart, it will help you avoid much of the risk of starting a new business.
Okay, so far we’ve done a pretty good job of hyping the benefits of owning a franchise. But even a second-grader knows that it’s an imperfect world. Nothing is ideal. Certainly there must be some disadvantages to owning a franchise. Here are a few, as noted by Small Business:
- Costly Investment. The start-up costs for franchises vary depending on the type of business, demand and industry. Start-up costs often are a disadvantage for franchises. Top franchises like McDonald's and Dunkin' Donuts could cost over $1 million, depending on location.
- Access to a Limited Territory. Franchise agreements protect owners by not placing franchises from the same brand within a predetermined radius. While that's helpful in many ways, it also limits the number of customers a franchise can reach and service.
- Strict Operations Guidelines. Owning a franchise does not offer the same freedoms as starting a company of your own. Each franchise gives franchisees a set of guidelines they have to follow or run the risk of losing the right to operate.
- Risk Reputation. While there's a benefit to running a business that's visible in the market, it can be a problem if the business has a bad reputation because of other locations.
- Limited Exit Strategy. No matter how small or large the business or how long it's been in operation, every operation needs an exit strategy. While most owners have several possible ways to exit their businesses without outside sources interfering, franchises have strict rules.
The links below, as seen in this article on the topic, are included to provide additional information: