25 Sep Considering a Franchise? Why it could be a great fit
Franchises are popular choice among budding entrepreneurs for a variety of reasons. Established franchises even more so. The reasons behind their appeal are numerous.
Name RecognitionTopping the list is the ability to take advantage of the name recognition of brand that is already out there, known and trusted in the community.
Take home healthcare, for instance. How comfortable would a prospective customer feel entrusting the care of their mother to a start-up agency without much of a track record to go off of? The building trades can also run into similar problems. Would a customer feel at ease investing over $30,000 to upgrade their kitchen without knowing the quality of the products, the type of warranty to support the workmanship, or if the business will even be around in another few years to honor whatever warranties they do offer? A franchise allows budding business owners to side-step these pitfalls.
When a budding business owner buys an established franchise, not only do they take advantage of the power of the franchise brand, but they capitalize on that particular business’ existing relationships and good name in the community.
Built-In Advertising & MarketingMost franchises take care of your marketing and advertising as well as have out-of-the-box logos, marketing collateral, and other identity. Figuring out what marketing works and what doesn’t is one less thing you have to worry about. Plus, you’re benefitting not only from brand’s reputation in your local community but from across the United States as well. When tourists are visiting your town or new residents are moving in, you have built-in name recognition.
Training & Support – As Long As You Need It
You, and quite often your staff, enjoy ongoing benefits from the training, support, and coaching provided by the corporate office. Usually, it’s a mix of in-person training and online modules that keep you fresh and inspired.
Likewise, many franchises offer members optimized, state-of-the-art operational systems that get you up and going faster and provide you with the tools to keep your business performing at a high-level. There’s no need to re-invent the wheel.
Many franchisees enjoy the ability to tap other franchise owners, find out what their experimenting with, how they dealt with an issue you just encountered, and more. You have a built-in support network.
Collective Bargaining Power
In many instances, you’re also getting to capitalize on the franchise’s collective bargaining power and ability to secure favorable vendor relationships. These cost-savings that you pass along to consumers give you a competitive advantage in your market place.
But a Franchise Isn’t Always Right for Everyone
But a franchise isn’t the right fit for every buyer. Some chafe at the restrictions that the corporate office places on how a franchisee runs their business. After all, the power of the franchise brand is built on consistency, and “innovation” and “experimentation” are not always welcomed.
Depending on the franchise, sometimes the initial fees can be substantial. Investments in leasehold improvements, signage, and technology may be required. In certain instances, buildouts to the space are required, which not only take time but money. When you buy an established franchise, however, you often get to take advantage of the Seller’s investment and leapfrog right in to a steady stream of income.
Some consider the royalty, marketing, and other regular ongoing fees a burdensome operational expense. From time to time, the franchise may require for you to pay for a “refresh,” meaning an upgrade to your place of business in order to conform to their latest look and amenities.
While some may argue that these investments are the cost of doing business and what a smart entrepreneur would want to do regardless, the franchise options is simply not for everyone.