Advantages of Owning a Franchise

Written by Whitaker Stacey

Although not everyone is cut out to be a business owner, if you’re looking to open a small business, purchasing a franchise may be the easiest—and most profitable—way to go, especially if you’re a first-time entrepreneur. Franchises, although costly initially, can provide a tried-and-true, cookie cutter business approach that works. Essentially, by purchasing a franchise, you’re putting yourself in the shoes of an established business owner without actually having any prior business experience. From this standpoint, you are in a prime position to see some real profits.

Pre-Established Brand

If you purchase a franchise, you’ll have the advantage of owning a business which has already established a brand and a customer base. This could potentially save you thousands of dollars on the advertising usually required to get the word out about a new business. Think of all the money you will save on flyers and mailers as well as radio and television advertisements. You’ll need to be sure that you do some research on the company’s track record, however, to ensure that you’re getting a brand that is reputable and will attract the amount of customers you need to pay your overhead and still make a profit. You can purchase all types of franchises, not just restaurant chains, so no matter what kind of business you’re looking to get into, franchising is an option.

No-Brainer

If you open a small business on your own without any support but your own sweat and tears, you may find yourself flying in the dark. That is, you’ll have to make your own decisions regarding every aspect of the business operation including hiring, inventory, customer service, quality control, and the list goes on. With a franchise, most of this work will be done for you. Your responsibility will be to simply do the legwork necessary to operate the business from day to day. The difference between dreaming up your own business versus purchasing a franchise is like the difference between buying a toaster with an instruction manual versus building your own with a few pieces of metal and a wire or two.

Quality Assurance

Another advantage of buying a franchise is the peace of mind that comes with knowing that the products or services you are selling will live up to a certain standard of quality. Of course, the specific level of quality will depend on which franchise you buy, but at least you will rest easy at night knowing that these standards have already been established. You won’t have to worry, for instance, whether the contractor you hired will deliver on his services because the contractor will have already been hired by the corporation and established as a reliable provider.

The Odds

By purchasing a franchise, you are significantly increasing the chance that your business will succeed and your doors will remain open. The reason for the higher success rates associated with franchises is really pretty simple. With a franchise, the business model has already worked, or it wouldn’t be a franchise. On the other hand, if you’re starting your own business, then you’re putting your capital—and your time—behind a theory that’s yet to be proven.

Potential

Franchises have much more growth potential than independent small businesses. Because many franchise locations are available, you’ll have a much better chance of purchasing a sister shop down the line than you would coming up with the capital to open another location on your own.

Wholesale Prices

Typically, franchises have contracts with wholesale companies that offer goods and services at a discounted price in exchange for long-term bulk orders. A private small business owner would likely not have the buying power or contacts to secure these money-saving opportunities. With a franchise, you benefit from the same wholesale prices enjoyed by large corporations.

Financial Support

Depending on your agreement, the corporation may be willing to provide some assistance if the unspeakable happens and you find your business suffering. Some franchises offer assistance in the form of monetary support to get you back on your feet. They may also let you out of your contract early if you go bottom up.

Conclusion

Opening up your own business, whether it be a franchise or a start-up is not a small decision. There is no guarantee, even if you do choose to go with a franchise. If you purchase a franchise, however, you will have more support and less risk than if you go it alone.

References

The Advantages of a Franchise Agreement. Chron. Retrieved from
http://smallbusiness.chron.com/advantages-franchise-agreement-196.html.
What Questions to Ask When Buying a Franchise. Chron. Retrieved from
http://smallbusiness.chron.com/questions-ask-buying-franchise-200.html.