Many people dream of giving up their nine to five and starting their own business. With the number of small businesses in the U.S. reaching 32.5 million in 2021, this number continues to rise.
Despite the allure of being your own boss, starting a new business is always a risk and there is no guarantee your venture will be successful. That is why franchise opportunities can be attractive propositions, as they allow you to take advantage of a successful business model that is already in existence.
A franchise is a method of marketing and distributing a product or service in which the franchisor, or owner of the business, grants the franchisee the right to trade using the franchisor’s name and operating systems.
In exchange for this right, the franchisee agrees to pay the franchisor a one-time initial fee and an ongoing royalty payment.
There are many different types of businesses that can be franchised, from food and fitness to hospitality and professional services. If you are considering whether to invest in a franchise business this article will outline some of the advantages such an opportunity can provide you.
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For any new business to stand the test of time, it must develop a certain level of brand recognition. The advantage of owning a franchise business is that it comes with an established brand name and reputation.
Inheriting such a business allows you to benefit from an existing customer base, many of whom are loyal to the brand, knowing they can expect a certain level of service no matter which location they frequent.
Having the right to trade under this brand name means that unlike a startup of your own, you will not need to spend so much of your marketing budget on attracting new customers and promoting your brand.
Investing in a business that has a proven track record of success will also mean there is less risk of failure. A business that has been in operation for many years with established systems in place can offer you a greater guarantee of success than if you venture out on your own.
Many franchises are successful brands that have extensive industry experience and have weathered the storms that come with being in business. They have established their presence in the market by learning from their mistakes and warding off their competitors.
This significantly lowers the need for trial and error on the part of the franchisee, allowing them to profit from their success more quickly than if they were starting their own business.
Support and Training
Ongoing support and training from the franchisor are other advantages of owning a franchise. The franchisor has a vested interest in the success of its franchises and in ensuring all franchises are aligned with the brand.
This is why most franchisees are provided with an initial training program, as well as ongoing support which greatly improves their chances of success. Such support can include technical support in the opening of your business, sales and marketing education, advice on generating business, and customer service training.
The franchisee may also be supported by being given access to operations manuals which act as a how-to guide for the franchisee to operate their business.
A challenge often faced by many new businesses is difficulty in raising capital. Being able to fund the initial investment needed for a startup can be a challenge to any aspiring business owner.
However, franchising can make it easier to finance your investment as lenders are more likely to approve loans that are contributing towards a long-standing business with a brand reputation and profitable business model.
This article has outlined four main benefits of investing in a franchise business. The success of such a business will depend on a number of factors and it is important to research your options to find a franchise opportunity that is right for you.