Advantages to Buying a Franchise
While not all franchises are the same, following are the most common advantages to buying a franchise:
- Franchised businesses have the highest success rate and the lowest failure rate of any business model in the United States.
- New franchisees often acquire an established customer base on the day they open for business. When consumers see a business name they recognize, the consumer knows what they will receive for their money. For example, lets say you are two hundred miles from your home and see a Carl's Junior, You will feel confident and purchase a meal. The local franchisee acquired a customer because they purchased a franchise. This is an example of brand recognition and creating value. When you purchase a franchise, you purchase a recognized name, reputation, and logo.
- Franchises often benefit from the combined spending power of the franchisor and all franchisees. When franchisees pay royalties that include a contribution toward advertising, combining dollars results in more advertising for each franchisee dollar invested. In short, the franchisor can bargain for discounted advertising rates based on volume which provides each franchisee with lower operating costs.
- When you purchase a franchise, you know exactly what you are getting before committing to purchase because you receive a detailed franchise disclosure document that is required by law.
- Franchised business generally has greater access to financing sources should the business owner have a need or desire to borrow funds. All things being equal, banks usually prefer business borrowers that are franchisees of well-run franchise.
- Franchisors are available to provide franchisees continuing assistance and recommendations to help them succeed. Franchisors have a team of people working for them to help franchisees succeed. Franchisors usually know what works and what doesn't work in a particular situation, and can therefore, save franchisees, both time and money. Franchisees can avoid mistakes that others have made. Help is usually just one phone call away.
- Many franchisors permit franchisees to start and build their own business before they leave their existing job. This can give a franchisee a head-start on earning income while reducing his or her risk.
- A franchise is, a community of people with similar interest, goals, and challenges. The group can be a great source of ideas, information, and mutual assistance.
- Most franchisors keep the franchisees informed about new laws, new regulations, and new technology affecting their business and industry. This provides franchisees peace and mind and saves money.
- Many franchisors regularly invest in research and development in order to improve the products and services offered by the franchisees, this keeping them competitive at all times.
- If a franchisee has a problem, it becomes a problem for the franchisor as well. Since the franchisor's success is tied directly to the success of the franchisees, the franchisor is highly motivated to provide all possible assistance. Thus, any problem is shared with the franchisor who will usually help find a solution to any problem that may arise.
- You acquire a greater degree of control over your future, your time, and can never be laid off.
- You will acquire the respect and admiration of many others when you become the owner of your own franchised business. Owning a business is the dream of many but the achievement of few. It is an opportunity to become established and known within your community.
- The development and later sale of a successful franchised business can be the bridge to a comfortable retirement.
- You are investing in yourself and creating an opportunity for that affect your future.
- When starting your business, you can avoid paying thousands of dollars in consulting' fees and attorney's fees to develop a bookkeeping system, contracts, business forms, marketing manuals, employee manuals, and written operating procedures because they are normally provided by the franchisor. You can avoid reinventing the wheel when you purchase a franchise.
- Franchisor provided website are likely to provide your franchisee business with immediate high-ranking results due to their numerous relevant links, size, and design features. This can translate to immediate business and revenue.
- Being part of a franchise gives you more time to focus on your customers because you will be spending less time on administrative matters.
- Franchisees often acquire an exclusive territory with no other franchises sold in the same area. These territories can become highly valuable over time as the franchise becomes more and more established.
- Expansion of a franchised business can be achieved with relatively low risk by purchasing additional franchises from the franchisor, or other existing, operating franchises from people who are retiring, moving out of the area, or leaving the business for any other reason.
- Retiring and selling y.our franchised business can be achieved by selling to an existing, successful franchisee who wants to expand his or her business. Existing franchisees are logical buyers because they understand the business, require no training to operate the business, and are already presold on the business model.