Advantages Of Starting A Franchise Business
A Franchise Opportunity has numerous benefits over starting a business on your own
. The major reason why it pays to become a franchisee is that you are much more likely to still be trading profitably after five years of trading. Over eighty percent of new start ups fail within the first five year!When one buys a business from a franchisor they receive a detailed training programme. This covers all aspects of running a business. The training programme is critical in ensuring that your business runs smoothly. It is the franchisors interest for the franchisee to succeed as then he receives higher royalty payments. This also serves to attract new people to their franchise system. The more that succeed with the business the easier it gets to attract quality people.
The franchisee also benefits from all the logos, stationary, brochures and websites that have been created. Someone starting a business on their own has to spend a huge amount of time in just creating a brand image. Most lenders are willing to offer a higher percentage of funds required to start a business to potential franchisees than if they were starting a business on their own. This is because they recognise the potential of buying a franchise. They also have to protect their investment in the business and realise that their money is much more likely to be repaid by someone buying into a franchise.
The franchisor even assists the franchisee with the territory. Usually this advice is free unlike when one starts a business on their own. The market research and advice on territories likely to succeed might have cost the franchisor a serious amount of cash but is yours for free if you buy into his systems.
The franchisor will even help the franchisee to secure planning permission using their knowledge acquired through years of experience. Trying to tackle this maze on your own without paying for specialist advice is a minefield. Paying for specialist advice costs a small fortune which is why most new business owners do not do it.
By buying into a franchise business almost nothing is left to chance. Your stock levels are predetermined by the franchisor and have been based on years if not decades of experience.
Starting a business is only the first phase in achieving profits. This is where the ongoing support and further training if required comes in. Most franchisors provide further training at favourable prices. They only usually try and recuperate their costs without trying to make a profit on their training programmes.
When it comes to advertising on a national scale the franchisor can achieve true cost savings. They can negotiate national rates and then spread the costs throughout their franchise network. The franchisee does not need to worry about the logistics of creating an advertising campaign and benefit from the expert knowledge of the franchisor.
The downside is that even though you are running a viable business that generates a decent profit, it is unlikely that you will ever create a new empire. Starting a business on your own has huge risks but the potential upside can be huge if you enter the market at the right time and in the right place.
In my opinion though, the benefits of buying into a franchise far out way the risks in starting a business on your own. If you are seeking to reduce the risks associated with going into business on your own then a franchise business might be right for you.
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