Whether you’re an entrepreneur who has developed a successful business or an individual looking for a new career (perhaps during ‘unretirement’), franchising can be a beneficial endeavor.
But is it right for you? Like anything else, franchising has both advantages and disadvantages, and it’s wise to consult with experts – including franchise attorneys – before taking the next step.
What is clear is that franchising remains one of the fastest-growing forms of small business in America. Studies have shown that franchising creates 300,000 new jobs each year, and franchising continues to open the door for women, minorities and families.
What follows are three advantages to becoming a franchise owner.
1. A Proven Business Model
Perhaps the biggest attraction of becoming a franchisee is that you get to use a proven business model. If the franchise has been successful that usually means the major kinks and problems have already been ironed out.
With that proven business model also comes corporate support. That support comes in the form of marketing, training and even financing. You’ll get the corporation’s expertise and, in many cases, they will offer management and technology training to your employees. Having a corporation at your back can also mean that you don’t need to have extensive expertise in the product or service that you’re selling.
Another plus? You’ll also benefit from nationwide and local ad campaigns and promotions that have already been established. Moreover, many companies help their franchisees by offering loans to help with startup costs.
2. Brand Recognition
Buying a franchise also means purchasing built-in brand recognition. The vast majority of franchises are well-known companies that already come with an established customer base. In turn, this saves on the time and effort needed to build a reputation and attract customers (and then retaining them).
Franchises undoubtedly spend a lot of effort building and improving upon their brand. In turn, you can expect a decent return on your investment from the first day you open your doors. You won’t have to spend time convincing customers to try something new, which can be a significant challenge for new businesses.
3. Limited Risk
While there may be no such thing as a sure thing, buying a franchise will help you avoid a lot of the risk you’d have if you opened a new business. You’ll need to do your homework and put in a lot of hard work, but you’ll enter into it with some certainty about the results.
Again, you don’t have to worry about building a brand or work out every detail as to how the business should run. You pay a fee to operate an established business in which you sell a set of products or services that are consistent at all brand locations.