If you’re looking to venture out on your own and open a small business, you’re probably visualizing an independent start-up in your mind, but it is folly not to consider buying a franchise. Franchise companies come with a plethora of advantages that should not be overlooked.
The International Franchise Association (IFA) explains franchising as “a contractual relationship between a licensor (franchisor) and a licensee (franchisee) that allows the business owner to use the licensor’s brand and method of doing business to distribute products or services to consumers.”
The IFA also explains the difference between a franchise and independent business, writing, “While from the public’s vantage point, franchises look like any other chain of branded businesses, they are very different. In a franchise system, the owner of the brand does not manage and operate the locations that serve consumers their products and services on a day-to-day basis. Serving the consumer is the role and responsibility of the franchisee.”
While an independent start-up sounds like the ideal way to do business, a franchise has the perks of being in business for yourself like a start-up, without ever being by yourself. You will always have the franchisor’s ongoing support. Remember, the franchisor wants you to be successful.
Other reasons to consider buying a franchise include:
- Less experience
Buying a franchise is great if you have little to no experience in owning your own business. You are provided with detailed instructions on every aspect of the franchise business and how to run it. On the contrast, you may have adequate experience being an entrepreneur and buying a franchise is still a better option than starting an independent small business because you lack knowledge in the field/area you wish to specialize/operate in. For example, you might want to open a store in the food industry, but you’ve only ever worked in the technology sector. Opening a restaurant franchise is the safer bet with a higher success rate.
- Proven system
When you buy a franchise, you buy an established way of doing business. Your franchisor has an existing system that dictates the way you can sell their product/service. This sounds restricting, but if you’ve found a successful franchise to buy, it’s a good thing. An existing system is something that has already been tried and tested and proven to work. This decreases your mistakes and increases your chance of success.
- Less risk, higher success
Franchises come with less risk because there is less guesswork. With proper in-house training, a proven system and pre-and post-opening support, a franchise comes with less risk and higher chances of success. If you’ve chosen a reputable franchise company, you’ll be well-prepared for opening your business. A franchise also comes with brand recognition. Customers are more trusting if they’ve already heard about your company and product/service. Many franchisors provide marketing and call center support as well.