The Top 7 Advantages of Owning a Franchise
Below is a list of some of the top reasons to buy and own a franchise.
1. Three Paths to Business Ownership
There are three ways to obtain your own business. First, you can start your own business concept from scratch, which can take years to develop and make profitable, and is very high risk. Second, you can buy an existing business, however, you need to be able to perform a deep level of due diligence on all aspects to ensure you’re getting a good deal. Third, you can Buy a Franchise, which is a proven business model with brand recognition, specific operating guidelines, and legal disclosure requirements. This is the only option of the three that is regulated by the federal government, which helps protect you as the potential business buyer.
2. A Franchise to Fit Your Vision
There are franchises available in almost every industry to align with your lifestyle and interests. Franchise businesses span everything from automotive and personal services, to restaurants and hotels, to retail and business services. Almost everything can be and has been franchised. In addition, most franchisors allow you to customize the level of investment or size of business you want based on your financial qualifications. There are options to buy a single or multiple units, or to buy the rights to develop a region or become a master franchisor. This flexibility of options is not readily available when buying an independent business or doing a start-up on your own.
3. Be Your Own Boss and Be Part of a Team
Being able to control your own destiny and build your own legacy is the attraction of having your own business. Unlike working for someone else in a job, you have the freedom to choose your own hours and be as financially successful as you want. As a franchise operator you have this liberty, yet you have the systems, support, and guidance of the franchisor, who is already successful in that business. You also have a team of fellow franchisees who can share best practices and help you work through any obstacles along the way.
4. Higher Rate of Success
Franchises have a success rate of over 90% where independent start-up businesses have less than a 15% survival rate. They are more successful because they have already developed the marketing, brand identity, products or services, systems, and profitable business model. They have made the mistakes and done much of the learning for you. The value of all of this experience and the resulting success rates far outweigh the franchise fee.
5. Economies of Scale
Most small-business owners do not have the buying power to negotiate the best prices on products or services. As a franchisee you benefit from the economies of scale that are usually reserved for big business. This can affect your bottom line in all areas including janitorial services, marketing and advertising, product costs, signage, construction and development, and even your cost of labor – which allows you to be more competitive and more profitable.
6. Ongoing Training and Support
The franchisor has a vested interest in helping you succeed over the long-term. A great franchisor, focused on growth, will provide ongoing training and support to stay relevant in the changing marketplace. At the corporate level a good franchisor will be researching trends, creating products and services, and updating systems and procedures to ensure you and the entire franchise remain competitive.
7. Multiple Paths to Profit
Franchises, unlike other businesses, have several ways of increasing value. Obviously, you will grow your own business at your franchise locations. At the same time, your franchisor will be striving to grow the overall business. The bigger the entire franchise group becomes, the more valuable each individual location becomes. The business appreciates beyond your individual efforts. Imagine starting a sandwich shop on your own versus buying a Subway franchise 20 years ago, and what each would be worth today. Being part of a successful franchise can help accelerate the market value of your business, and in the event you want to sell, can expedite the sales process with a buyer who knows the brand and is ready to purchase.