When you know you want to run a business or have any kind of entrepreneurial streak in you, the allure of owning a franchise can be great. Just about any kind of product or service that interests you probably has one or more franchising operations, from fast food, education, grooming, beauty, and pet care, to housekeeping services.
As one of the most successful business models in the US, franchising is known for its benefits like growth, expansion, unit-level economics, and opportunity, is both a legal and business framework. However, it is important to note that, franchising is not for everyone, depending on your individual goals, it is important to understand all its aspects before jumping in.
A Little Background on Franchising
Franchising is a process of buying into an existing, successful business model that comes with a proven track record, a training program, a solid supply chain, and expert technical support throughout. To simply put, a franchise governs the method of conducting business between the two parties with a legal and commercial relationship between the owner of a trademark, brand name, and an individual organization. Think of franchising- or at least the costs of it- as paying for the work someone else has already done in developing a successful business model, establishing marketing strategies, and superior operations efficiencies.
The popularity of franchise business models, in general, is due to their proven track record of success and the ease of purchasing a fully operational location and even starting from the ground up at a new location. If you are detail-oriented, good at following directions, and comfortable with established systems, the former option enables you to step right in and take over a business with a workforce already in place, an existing customer base, and documented cash flow.
As a franchisee, when you buy a franchise, you will be investing your capital, time, and managerial efforts in developing and opening a new franchised location.
Coming to the stats, as compared to independent businesses, the success rate for franchise-owned businesses is significantly higher. With that being said, in the year 2002, nine out of ten franchise owners reported great profits. Plus, with every dollar spent by consumers, around 40% is spent on a franchised business. A new franchise business opens every 8 minutes every day. The benefits of franchising are endless, if you are in luck you will find a reputable independent consultant like FranGuidance who will help you with the step-by-step process. So what are you waiting for?
Finding a Right Franchise
According to you, what does an ideal franchise model look like? The key to finding a franchise opportunity that is right for you is research- and lots of in-depth knowledge of the processes. You will first need to know what you want and how much you are willing to invest.
Here is what a good franchise looks like:
Allows the franchisee to do what they love while running their very own business.
Gives the opportunity to work for yourself and to serve a real purpose.
Great way to start a business when you want to work for yourself and have a little idea of how to start.
Your independent consultant will start by learning about your interests, goals, and objectives before equipping you with the list of franchise models. Based on that criterion and your budget, they will give you an inside track to pre-screened franchises and what type best fits your lifestyle. Apart from the initial fees, there are other typical costs, that include real estate to equipment costs and the average royalty fees in some cases. Once you have identified a few legitimate and beneficial franchising opportunities that you can afford, the next step is the discovery phase which gets you to the real scoop on earnings, support, and costs with education and support from your consultant.
Of course, you need answers for several things like, how much liberty will you have? How much marketing, consulting, and training help does the franchisor provide? Are the earnings up to your expectations? All this will help you choose a perfect brand and become a franchisee. Not only this, the other key piece to finding the right franchise is examining the benefits or true nature of franchising.
Some of the Benefits You Will Want to Consider Before Making a Leap into Franchising
Ready-made Business Plan: So let’s put it straight forward, when you open your business from scratch, there will be failures that will cost you money, time, energy, and frustration. These pitfalls can be avoided with a franchise as they have a tried and true system to fall back on. If you don’t relish the process of crafting a business plan, choosing what to sell, hiring employees, and all other minutiae involved in setting up a business, buying a franchise is the best option for you.
Built-in Support: If you have ever started a stand-alone business, you would know there is nowhere to turn for advice or solutions when things get complicated. The only other investors in the same business would be your competitor. The great thing is that franchises support each other. With a network of support from experienced partners, you can always turn for advice, whether it is about marketing support or finding reliable suppliers.
Access to training: You can master one part of the business, but struggle with other areas. For marketing, product pricing, and much more factors that are already fixed, you just need to go through and polish general pointers, thanks to their hands-on experience, general advice, and more tailored tips. You don’t need to figure out everything for yourself, which you would have to do if you were setting up a new company alone.
Easier Financing: Some franchisor also provide you with loans and other financial assistance. Now, the in-house financing might not always come with low-interest rates, it is good to get help from independent consultants to get support through launch. Moreover, unlike traditional business, where an entrepreneur continues investing more of their own capital as they open new locations, franchising provides opportunities for expansion with the capital they bought. All you need to pay is the initial fee to join the franchise network!
The benefits of franchising can go a long way for a business owner. Apart from the above-mentioned, when you invest in the right franchise you will have the name recognition of the existing company with an existing customer base you can grow on.