Have you ever thought about owning your own business and wondered whether you’d be better off starting from scratch or joining a franchise? We explore some of the benefits of owning a franchise compared to starting from square one:
Though it’s not necessarily a walk in the park, financial institutions are generally more willing to lend funds to those opening a franchise business than those opening a new business on their own. This is because they often determine that there is less risk in opening a franchise under a proven model than a greenfields business with no track record. The franchisor will usually assist by providing you with financial information and guidance on your business plan to present to the bank.
SUPPORT & MENTORING
When you join a franchised business you agree to operate within the systems and processes that have been developed to make the business run efficiently and effectively. If you were starting a business from scratch it may take months or years for you to develop successful processes to achieve the same results. A franchised business will usually have a full team of support staff whose roles are to operate the day to day of the business such as marketing, finance and operations.
In many cases there will be no need for you to have previous experience in the field that the franchise operates in, or even experience operating a business - many franchisors will provide new franchisees with in depth training to prepare them for operating their franchise. Generally there will also be regular mentoring and business health checks to ensure you’re on track - it’s certainly in the franchisor’s interest to work closely with franchisees to ensure their ongoing success, as the franchisee’s success is also the franchisor’s.
Franchisees also benefit from the established brand of the franchise business. Many franchised businesses are household names that are being grown on a national level, supported with integrated marketing strategies and dedicated marketing funds. This level of brand recognition and exposure would be very difficult to achieve for a single location business, not to mention the existing customer base who are already familiar with the brand and its products or services.
ECONOMIES OF SCALE
As part of a franchise business you will usually benefit from group buying power for the products and services that you require to operate the business. The franchisor often holds the responsibility of managing relationships with third party suppliers and negotiating rates based on volume. This means that operating a franchise can have significantly lower overheads than a similar business that is not within a franchised network.
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