Advantages of being a franchisee include:
- Entry into a business network of experienced professionals
- A successful base for you to build upon
- Becoming part of a recognizable brand
- Prior business experience not typically a must
- Higher rate of success than independent start ups
- Often cheaper than independent start ups
- Investors more likely to partake.
Let’s expand on each of these points.
Entry into a successful business network.
When you become a franchisee, you are buying into a business network that has already figured out how to succeed. You stand to benefit from this success in many ways, and the network stands to benefit as well. Your success is theirs too. So, if you find yourself struggling or in need of a solution to a particular problem, there will be many experienced people who will gladly help.
A successful foundation for you to build on.
If a brand is expanding, it is likely that they have many important things figured out: branding, target market, inventory management, employee management, business technology, budgeting, and countless others. Whereas if you start your own business, you will have to build all these systems while creating a quality product and a recognizable brand, by buying a franchise you will implement what has already worked for many others.
Becoming part of an immediately recognizable brand.
This is one of the most significant benefits of owning a franchise. The goal of every business is to create a brand which people immediately recognize. When consumers know what to expect, they are more likely to do business with you. Reaching this level, however, can be a tall task, and an expensive one when you are fully responsible for your own marketing and advertising. But, when you become a franchisee, it has already been done for you.
No prior business experience needed.
Some brands may require franchisees to have business experience or a business degree, but generally speaking this is not the case. Most brands provide the training needed to run the business up to their standards, and most initiatives – marketing campaigns, updated practices, new products and services – come from above. In this manner, you will learn most of what you need to know and most of the crucial business decision will be made on your behalf.
High rate of success.
Buying a franchise does not guarantee success, but it does make it more likely. According to Entrepreneur, 85% of independent businesses fail, compared with only 10% of new franchise locations. Again, this makes sense when you consider that brands looking to expand have probably already figured out the formula for success. By becoming part of that formula, rather than trying to figure it out on your own, you are giving yourself a running start.
Often more affordable than starting an independent business.
Starting a business is, needless to say, quite expensive. You need a permit, a lease, inventory, employees, furniture, tools, insurance, copyrights, and much more. As a franchisee, you will need all these things as well, but rather than shopping around for each individually, you will purchase them through the franchisor or by means of some channel which they give you access to. Depending on the brand, this could cost a substantial amount, but you know exactly what you are going to get for your money, and the purchasing process is, if not less expensive, certainly more efficient.
Easier to find investors.
Taking into account all that’s been said so far, it’s no surprise that investors are more likely to put money into a new franchise location rather than into a brand new venture. So, if the cost of buying a franchise is too high for you to pay out of pocket, it should be relatively easy for you to find others to help you shoulder the load.
What advantages helped you out when you became a franchisee? Let us know in the comments!