The franchise industry is one of the biggest and most economically important industries in the US. There are more than 750,000 franchises in America, with almost eight million people on their payroll. Buying a franchise is often the best investment choice for entrepreneurs who want to have their own businesses. This is because franchising provides a lot of benefits that a start-up does not offer. And those benefits are great reasons to buy a franchise rather than venture out on your own.
1. The Brand
If you are striking out on your own, it is hard to know whether customers would like your business idea and your brand. But as a franchise owner, your parent company has already done that for you – all you need to do is maintain it. Franchising also gives you the right to use a well-known brand name, product, and logo, so potential customers would already know what you are offering before you even open your doors.
2. Marketing
Franchisors advertise on a national level to enhance and strengthen their brand. They have experts who conduct market research and come up with a consistent message that makes people visit your website. The money used for this marketing usually comes from the fees that franchisees pay before they are allowed to “get in.”
3. Training
Not only do franchisors have a business model that works, but they also provide continuous training to their franchisee. Pre-opening training and ongoing education are crucial to a franchisee’s success. They also ensure brand consistency for the franchisor.
4. IT Support
Unless you are operating a tech service franchise, you will spend most of your time creating a customer base, not repairing computers or selecting payments, even if you are tech-savvy. In most cases, franchisors offer technical support, manage POS systems, and integrate technology to make the work of franchisees easier.
5. Cost Advantages
As a franchisee, it costs less to get the supplies and inventory needed to run your business. This is because franchisors receive bulk discounts, which small start-ups won’t qualify for. A small business under a bigger franchise brand spends less on goods, and it is easier to become profitable when your expenses are lower.
6. Easier to Finance
Moneylenders look favorably on popular and successful franchisors. When a borrower is operating a business model that’s proven to work, it reduces the risk on the lender side, and they are more likely to give out the loan.
7. Higher Chances of Success
Statistics show that 1 out of 5 new enterprises fail within the first year of operation. But the idea behind buying a franchise is to join something that has already been successful, which means getting a proven business system to succeed as a new branch of the company.
8. Growth Opportunities
While you can open more branches as an entrepreneur, you are going to face a lot of obstacles along the way, such as an unrecognized brand, marketing expenses, and higher cost of goods. But when you buy a second location as a franchisee, you get to enjoy all the benefits of the first location.
9. Easier to Sell
A franchise is also easier to sell when the time comes since you have a recognizable product that could appeal to other investors. And considering that your franchisor has reasons to be interested in who buys your business, they may help look for a good replacement for you.
Investing in a franchisor business model comes with many benefits. It will be easier for you to replicate a successful brand than venturing out on your own. Fortunately, there are multitudes of franchise industries to choose from, so you are sure to find a franchisor who offers many reasons to partner with their profitable franchise brand.
