🕒 3 min read
Owning a franchise is a popular way to start a small business. When compared to starting a business from scratch, there are several advantages to buying a franchise:
1. You get a recognized brand
Buying a franchise can mitigate some of the risk associated with starting a new business because consumers already know the brand. While the level of brand recognition may vary, it's far better than starting a new business with no recognition.
2. You have some idea of how much you will make
When you buy a franchise, you are able to obtain projected earnings as part of your franchise disclosure document so you don't have to guess how your business will perform. You will have access to the average financial benchmarks from other locations to be able to judge what your business might look like. This will help give you insights into cash flow and financial performance.
3. Your costs are lower
When you start looking at franchises and notice franchise fees of $20,000 or more, it might be hard to believe that starting a franchise is less expensive than starting an independent business. However, there are several advantages to owning a franchise:
- With a franchise, you'll know exactly what inventory and equipment you will need to lease from the start
- You'll be able to get better pricing from vendors because of your franchisor’s ability to purchase larger volumes and get pricing arrangements
- You'll be able to save time and money because you know how to properly advertise your business and won't waste valuable resources on marketing and advertising that doesn't get results
- The franchisor has already taken on the responsibility of registering a trademark and creating the logo
- You’ll have a franchise company website with an established brand
- The franchisor will have an established supply chain relationship with discounts for franchisees
The reality is buying a franchise business will probably allow you to have positive cash flow quicker than a non-franchise business and that includes the franchise fee.
4. You get standard operating procedures
Too often when you buy an independent business, the previous owner may have known how to run the business, but it's all in his head and he’s never documented his standard operating procedures. With a franchise, you get a built-in operating history and written business plan.
The franchisor has already gone through the process of documenting business processes that will provide new owners with a successful operating system for their business. Why reinvent the wheel?
5. You have a built-in support system
Wouldn't it be nice to have a built-in support system so that when you have a problem, you can ask an expert the best ways to proceed and learn best practices? Buying a franchise gives you the availability of having a support team. The franchisor wants to make sure your business is a success and follows its best practices so it will reflect well on the brand as a whole. This is one reason why franchisors offer training for you and your staff as well as a support system to answer questions when you have them.
Is buying a franchise the right choice for you?
When you buy a franchise, you get a recognized brand, lower costs, and written procedures to help you know the best practices from the start (this translates to fewer mistakes!). If you have any questions, you have a built-in support system that is ready to help.
Susan Guillory is the President of Egg Marketing & Communications, a marketing firm specializing in content writing and social media management. She’s written three business books, including How to Get More Customers With Press Releases, and frequently blogs about small business and marketing on sites including Forbes, AllBusiness, The Marketing Eggspert Blog, and Tweak Your Biz. Follow her on Twitter @eggmarketing.