Franchising, now a widely embraced business model, got its start in 1851 and it grew gradually until the 1950’s when it virtually exploded across America’s landscape. Benefitted by the then-new and growing interstate highway system. Today, there are more than 750,000 franchised establishments in more than 3,000 different franchise concepts. There are many good reasons to purchase a franchise.
Why Purchase a Franchise?
The reasons to purchase a franchise include:
• A franchise is an established company that has a defined operating system. Rather than starting from scratch and struggling to define and create all the elements of a new business.
• Acquire a brand that has some established identity and recognition. That quickly can turn into understanding and value in the minds of the customers that you want to attract.
• There is a track record of success that is verifiable by speaking with other franchise owners and by reviewing documented business results.
• Have the ability to use prepared training programs and proven business methods. As well as having the ability to use ongoing operational support from the franchisor.
• Receiving real estate and construction assistance, as applicable.
• Getting marketing assistance including tools, strategies, plans, and budgeting guidance.
• Obtaining purchasing guidance, resources, and purchasing power. That applies to supplies, equipment, uniforms, and inventory.
• Getting some financing assistance, in some cases, either from the franchisor or from the financial partners of the franchise corporation.
All these reasons support reduced risk when you purchase a franchise versus starting a business from scratch.
The Disadvantages When You Purchase a Franchise
The disadvantages include some expensive startup costs including an initial franchise fee, plus ongoing royalty payments. Further, each franchise owner is bound by franchise rules and policies and is linked to the reputation of the brand itself. So, it is critical to choose the brand wisely.
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