According to the International Franchise Association, there are more than 7 million people employed within franchises around the world. Likewise, a new franchise opens up every 8 minutes in the United Stated. By those numbers and additional research, analysts have establishes that one in twelve businesses is an established franchise. This is due to a growing boom in entrepreneurship – mainly among those who are not satisfied in pursuing a degree that puts them to work directly under a supervisor. The boom in franchises is also expected to continue… but is owning a franchise the right choice for you?
The Pros of Buying a Business Franchise
A Franchise is Turnkey – In many cases, an established corporation has a development and deployment plan in place for a business franchise to ensure that it operates properly and profits. While there are things you need to do to get some franchises off the ground, they come with a written success model – like a treasure map to retirement.
Business Franchise Support – A person opening a small business for the first time on their own is likely to have to learn as they go. This means a lot of stumbling and learning from mistakes. When you buy a business franchise you become part of a network. You’re in business for yourself but you’re never by yourself.
The Power of the Brand – For establishes companies, brand awareness can almost guarantee success when the proper research is done and you open in the right market. This can account for a lot of savings on the marketing relating to launching and opening a new business franchise
Lower Inventory for Business Franchises -Big brands have a lot of buying power, and that collective buying power often means great discounts with vendors that would love to have the business of your brand, including everything from common inventory to food and equipment. A new small business often has less bargaining power because you need them more than they need you.
Cons of Buying a Business Franchise
Less Freedom – When you open a small business of your own, you get to decide how everything rolls along. The business is truly yours. When you buy a franchise, it’s -mostly- yours. You have to report financial information and conform to the uniform corporate procedures and strategies though some give you leeway and creative freedom to a point.
Royalty Payments – Every business franchise is required to make payments to the parent company to support the operations and advertising supplied by the corporate brand. What you receive for your royalty payments – such as support and marketing – varies from company to company.
Higher Start-up Costs – In many cases it can be more expensive to purchase a business franchise because you need to go all in with your investment and corporations typically have a minimum amount of capital that you’re expected to have on hand – not in assets – in order to get started. A new business owner starting from scratch however might be able to trudge along by their bootstraps as they grow their business.
Communication Problems – This can occur when you’re in a franchise and you have to deal with corporate regulations and problem solving. Some franchisors may not be able to supply the field support you may nee