This is a common scenario among our potential investors:
You have been planning about an entrepreneurial endeavour for years and a current situation has finally given you the opportunity to pursue it. Maybe you have been a part of a restructuring, have been laid off, or is finally done with working for someone else, and is ready to make a profit on your own. You are eager to take control of your life, become your own master, and learn new skills in the process. You want a good return on investment and are ready and willing to do whatever it takes to kick start your chosen path, but your end goal is to work flexible hours and have more time for your loved ones and yourself.
Other advantages of franchising includes:
- You can take advantage of a proven business model
- The training you get will kick start your business quickly and effectively
- Getting a turn-key solution to set you on a path to entrepreneurship
- No prior business experience in the niche is required
- Lower cost of materials because of group purchasing power
- Franchisees learn from each other and create a support system
Having no prior entrepreneurial experience, the ongoing support you get from an experienced franchisor is important to your future success. You won’t be pre-occupied with every small detail of being an entrepreneur as you start a career in franchising, meaning you can focus all of your attention into expanding your business.
One potential con to owning a franchise is that you must follow the rules of the franchisor. Simply put, you are in charge as long as you adhere to the rules of the business model. This is important because the franchisor can provide consistency across the business. As an experienced business, they’ve studied and tested different procedures so their model has been proven. This is also beneficial to customers because they will get comparable services and products no matter which franchisee they patronize in any part of the country.
Another perceived disadvantage of becoming a franchisee is that one must remit royalties and at times an advertising fund fee. The royalty payments are given to franchisors for compensation for access to the brand, business model, and other related items. The marketing fee given to franchisors is used for the national advertising of the brand and to drive market penetration at a higher level than if franchisees did it themselves. National advertising funds allow franchisees to take advantage of professionally produced advertising materials.
For most people, franchising is a viable and realistic option to becoming an entrepreneur. Franchising provides the highest level of support and lowest risk. You will also find a support group of passionate professionals that help you throughout the process — from location choice to hiring and to opening. After all, the success of the franchisor is dependent on the success of its franchisees.
The team will communicate with you from the start to years into the business. There are toll-free contact numbers, websites, and a dedicated support staff to ensure that all your questions are answered promptly.
The cost of this continuous support comes in the form of royalty fees computed based on profits, but top franchisees know that the advantages are worth it. R&D is possible because of feedback from people out in the field. This cooperative participation is one of the pillars of a well-operated franchise.
These are the reasons why franchising is a successful business model, because it is mutually beneficial for the franchisee, customer, and franchisor.