A lot of people associate franchising with big popular systems, such as mega restaurant chains like Subway or McDonald’s, hotel franchises like Marriott or Hilton, or other business-related franchises like ServiceMaster or Curves. But while these big franchise systems have their own advantages, they also come with several disadvantages.
There are at least two things you can expect to get when you purchase a franchise: a recognized brand and a proven system to operate the business. The main benefit of partnering with big franchise companies is that they already have these two things in place. You can simply ask around to know the customer’s awareness and perception of the brand. Also, you can visit multiple long-standing franchisees of the company to find out how the franchise has performed over the years.
As a new franchisee, one more advantage of joining bigger franchise systems is their safety and reliability. Investing in a larger franchise system comes with less risk since they have already debugged their systems many years ago. While this does not imply that you will surely succeed in the business, you have better chances because of the large amount of information out there about the current operating system and existing franchisees.
But there are also some disadvantages to joining a large franchise system. A lot of them already have too many franchise outlets, so getting accepted into the system as a new franchisee is difficult. Most big franchises also look favorably to those currently operating the business when they want to open more units. This is because working with current operators will be less risky for them than taking a chance with a new operator with no track record of success.
The most common way new franchisees join bigger franchise systems is by buying existing franchise locations. And this can be advantageous to you, as it gives you the chance to review the financial and operational performance of the franchise unit(s) before making a purchase. It may even be better to buy an existing profitable franchise instead of trying to build a new business from the ground up, as you can avoid the losses that occur in the early days of a start-up operation. Therefore, an existing franchise can be a good business opportunity to invest in as long as you are sure you are receiving a profitable unit and not inheriting another person’s problems.
One more advantage of partnering with mega franchise systems is that their support team, vendors, and almost every other part of the system are way more professional and skilled than what you can expect to get with a smaller, newer franchise company. This will enable you to avoid common franchise blunders and maybe lower your overhead costs than when working with a less complex system.
A possible downside of larger franchise systems, however, is that the bigger they get, the more rules they have guiding the conduct of their franchise owners. Bigger franchise systems have already figured out and documented exactly how they want every aspect of the business to be operated, including operations, marketing, and layout. They don’t want innovators who will want to change things up. They are just looking for operators to implement their effective systems.
The mega franchise systems get plenty of applications from would-be franchisees per month, and they can only approve a few of them. So, as a prospective new franchisee, you may have to present your skills and qualifications aggressively for a big franchise to notice you and possibly consider your application. No matter what you have to undergo to achieve this, the reward may be worth it in the end.
All franchisors are looking for potential franchisees with the necessary skills and capital to operate their business successfully. Whether they are big or small, almost all franchise companies are interested in the success of their franchise operators. Both big and small franchise companies have such a heart. So, take time to review the alternative options you have when considering franchise opportunities (small or big) in order to identify the right one that can give you the best chances of success.
