I often hear concerns from buyers looking for a business that they will not consider buying a franchise due to the complexity of the Franchise Agreement and paying Royalty Fees. Having personally owned a franchise and sold many others, I believe these concerns should be considered along-side the benefits of owning a franchise business which are:
1. Proven Business Model
Franchised businesses typically have a proven track record of success. Provided you follow the franchisor’s business model and operating procedures you can have confidence the business will be successful.
2. Trusted Brand
When buying a franchise you are investing in an already recognizable brand. Unlike other small business owners who have to build recognition and a reputation, your business is likely to already be nationally known and recognized generating more clients as a result.
3. Higher Success Rate
The failure rate of franchised business is significantly lower than non-franchised small business ventures. Purchasing a proven, successful franchise usually offers more security than a non- franchised businesses.
4. Easier Bank Finance
Getting financed for a franchise business loan is generally easier than it would be if you were starting an independent business. Banks know the lower risk involved in a franchise investment and are therefore more willing to lend more on these business ventures.
Some people believe they lose their autonomy when they join a franchise. Although the franchise has rules and guidelines these are designed to help you be successful. You will still have the independence of owning your own business and the management decisions that comes with daily operations.
6. Full Support
With most new independent businesses, the only way to learn about your business and how to expand it is through trial and error. With the franchise, you will not only receive thorough training from the franchisor , but you will also have ongoing support in a number of areas such as human resource and employment issues, benchmarking performance, improving operational procedures and sales and marketing advice from within the group.
7. Market Value
Last but not least, when it comes time to sell your franchise the market value will generally be higher than that of an independent business. This is based on the perceived lower risk of failure and security of a recognised business brand and business model.
When buying your next business, do not dismiss investing in a franchise until you have explored all of the advantages it has to offer you.
Author Linda Harley 04 88103310