The Advantages of Franchising

To Consumers

Franchising is booming because consumers like to purchase goods and services from familiar names with reliable standards of service and quality. They like to deal with businesses where the owner is on-premise.

To Franchise Buyers

Here are some of the advantages of buying a franchise:

Established Track Record

As a franchise buyer, you become an owner of a proven system of operation. Your franchisor offers products/services that have sold successfully. You therefore have a historical basis to both learn and base new strategies from to help you predict your own future.

Faster Start Up

As a franchise owner you have assistance from a franchisor with solid experience. You can start the business right away with knowledge of the pitfalls already outlined

Lower Risk

Your chances of failure are lower with a franchise operation than creating your own start-up. This is mainly due to the experience, expertise and proven resources that will support you in your new business. The U.S. Commerce Department estimates that 95% of franchises succeed; only 25-35% of independent businesses succeed. Why the discrepancy? Since a franchise is usually a duplicate of an already successful business, it should succeed.
–Tested and proven systems save development time and help prevent mistakes.

Minimal Investment

Most franchises and their owners keep their front-end investment demands low, which favors new entrepreneurs. Additionally, a franchisor will often help new franchisees borrow by facilitating arrangements with lending institutions, which, incidentally, view favorably on lending to franchisees because of their high success rates.

Purchasing Power

The group purchasing power of franchisees can make a tremendous difference in your costs of doing business. Large buying groups can typically demand significantly lower prices on goods and services, imperative for new businesses to save cash.

Name Recognition and Brand Awareness

A main benefit and attraction to buying a franchise is name recognition. With a new franchise, you can grow and contribute to the creation of the brand as well.
–Trademarks - Customer awareness of the franchise name is a tremendous benefit and is part of the brand recognition.

Business Support

As a franchisee, you will generally receive valuable, ongoing business support, including site selection, training, recipes, marketing, new technology and more. Franchisers will assist you in developing a business plan, in learning the best ways to hire and manage personnel, and in how to profitably manage your facility. After all, franchisors make residual money from your success, and therefore have a vested interest in having you succeed

• Be One’s Own Boss – Running one’s own franchise allows an individual to feel the pride and independence of owning his own business.

Here are some of the advantages of franchising your company:

• Expansion Capitol - The franchisee makes the investment to open the branch unit.

• Fast Growth - Franchising allows companies to grow quickly because the franchise buyer puts up the investment capital and provides the management - thus freeing up the franchisor’s time to open more units.

• Quality On-Site Management - Since the franchisee is more dedicated than a company employee, sales and profits will be higher, expenses will be lower, customer satisfaction will be greater, and quality standards will be maintained. Today, most franchisees are well-educated, experienced, former middle managers.

• Fewer Day-to-Day Operating Headaches - The franchisee makes the day-to-day operating decisions. They take care of employee problems, hiring and firing. Thus the everyday headaches are no longer your problem.

• Less Corporate Overhead - Since the franchise owner takes care of the day-to-day operating responsibility, the parent company support structure for franchise units is smaller compared to company-owned units. Thus, overhead is lessened.

• Faster Market Penetration - Franchising can allow a company to penetrate the market quickly, thus generating significant revenues for parent company.

• Higher System-Wide Sales - Research shows that individual unit sales increase when converted to a franchise system. Because the owner is on site, a typical franchise unit will have higher sales than a company-owned unit, again adding to the bottom line of the parent company.

• Captive Market for you Products - Franchising can provide a dedicated captive market to manufacturers.

• Financial Leverage - Franchising provides a way to cash in on your experience and knowledge by selling it to others.

• Opens up Regional/National Account Opportunities - Some businesses lend themselves to serving regional or national accounts, whereas a local independent could not service a national account.

Please contact us for more information regarding Franchising your business.