Opening a business takes a lot of hard work. Stepping out into ownership is a big responsibility that comes with a great deal of risk. But what if you didn’t have to do it alone? What if you could have a safety net? Investing in a franchise gives you the benefit of belonging to a larger organization, with all of the support, training and resources that come with it, while investing in yourself through ownership. This is not the case when you build a business from scratch.
Proven Formula for a Successful Business Model
The security found in a proven track record of a franchise business model is ideal for even the more risk averse individual. The business model has already shown itself to be not only sustainable but profitable. Researching the company’s Franchise Disclosure Document (FDD) gives you the opportunity to scrutinize the model before investing. The FDD allows you to have a better understanding of what you are buying into, something that isn’t an option when building a business from the ground up.
Easier Access to Financing
Because the business model is already proven to be successful and financial projections are already documented, it can be easier to secure financing. The franchise already has built credibility with the bank, and some franchises even have in-house lending.
Hit the Ground Running with Less Learning Curve
Once you have decided upon a franchise model that best suits you, you are already ahead of the learning curve of starting a new business. Brand recognition, support and best practice systems are already set into place to give you a head start. New businesses do not have the benefit of an established infrastructure, but a franchise model can help you hit the ground running.
Real Estate and Build Out Assistance
With a franchise there is the benefit of real estate assistance in choosing the optimal site for your business. Demographic research data and extensive databases can provide you with the best information to make your site selection. There is also build out assistance, and design and layout guidelines have already been established, making it essentially a turnkey endeavor.
Training and Ongoing Support Systems
Training programs speed up the startup period and eliminate most of the trial and error characteristic of many new businesses. Reference materials and resources already exist and are at your disposal. Ongoing operational support ensures you are not alone and have the help of an experienced team. Franchisors have a stake in your success, which means they are highly motivated to support your success. There is a team dedicated to helping protect brand integrity.
Brand Recognition and Marketing Assistance
A franchised brand is usually well established and recognized. Marketing assistance with proven tools and strategies for attracting and retaining customers is already in place, which means there is already a customer base before you open for business.
Power of Bulk Purchasing
Bulk purchasing allows a franchise system to negotiate low prices for everything from initial furniture to equipment to supplies to inventory to uniforms. This means lower overhead and better profit margins for you.
Independence but Part of a Team
Being a franchise owner allows you to work for yourself but not by yourself. Peer networking is a huge benefit. With a focus on selling exclusive and protected territories, competition can be mitigated. This creates an environment where individual successes benefit the system as a whole, and sharing of ideas is encouraged.
Opportunities for Expansion
Depending on the scalability of the franchise’s business model, there are greater opportunities for owning multiple units. Many models are built to scale and have a system designed to support and encourage expansion.
Investing in a franchise gives you the opportunity to pursue entrepreneurship and build something for yourself. Your skill set does not limit you, as you have the backing of an established brand and support systems. It is a smart way to diversify your assets while investing in something that can be passed on.
Franchising provides a proven business model with all the benefits of belonging to a network that is working for your success. Investing in franchise ownership allows you to build a business with the security and safety net of an established company. You are able to bypass many of the challenges independent businesses face and move on to maximizing your revenue potential more quickly and more effectively.
One of the most important things to do when investigating a franchise is to ensure the type of ownership the brand promotes aligns with your personal and financial goals.