There is an obvious appeal to starting a business by buying a franchise. Whereas starting a business often comes with a lot of unknowns, a franchise is proof of a successful model already in motion.
That doesn’t mean that buying a franchise equals instant and sustained success. In fact, the mythical “statistic” that says that franchises are less likely to fail than other businesses is just that-a myth.
Running your own franchise is still hard work, and there are drawbacks to opening a business that requires operating by someone else’s rules. Franchising offers individuals the opportunity to be in business for themselves, but not by themselves.
The franchisor is there to provide support with all the different functions of the business. They have seen the issues that can arise in their business and know how to deal with any problems effectively.
If you’re exploring the idea of buying a franchise, you should know what you’re getting yourself into. Here’s a rundown of the pros and cons of buying a franchise.
The Pros Of Buying A Franchise
You may already have a franchise in mind-a certain type of business that is lacking in your neighborhood, or a company that you admire and want to be a part of by becoming a franchisee. Regardless of what franchise catches your eye, know that many franchises come with the following benefits.
Skipping Startup Stage
The most difficult part of owning a business arguably comes in the startup stage, where you have to write a business plan, conduct market research, create a minimum viable product, test that product, and then scale (if testing goes well, that is). Buying a franchise helps you skip this section: The system has already been tested and proven to work. It’s now up to you to apply their system to your market.
Instant Name Recognition
Franchises come preloaded with a name that people know and trust. Getting customers to recognize your brand is an incredibly difficult slog—but a franchise has a name that is recognized nationwide. For customers, there is no doubt what you’ll get when you walk into a Wendy’s or Barry’s Bootcamp. That’s a valuable value add.
A major part of what makes a franchise successful is its easily replicable system, which includes training employees at every location in how business is done. You’ll get help bringing new hires up to speed on how things operate-often with on-site training on opening procedures, daily operations, using point-of-sale software, and more.
Help With Marketing And Advertising
Although you as a franchisee may be required to invest a certain amount of time and resources in marketing and advertising (more on that next), the franchises themselves will promote your business via nationwide campaigns that are broadcast on TV, radio, and online.
You’ll have input and help from the franchise on how to craft and execute effective campaigns of your own as well. They may provide, depending on their size and resources, a marketing plan that covers a market analysis, strategy, sales forecast, and budget.
Access To Increased Purchasing Power
One obvious advantage that big businesses have over small businesses is their access to increased buying power. The franchise may buy large amounts of inventory and equipment on behalf of their franchisees, meaning you’ll obtain these important assets at a reduced cost.
Easier Access To Financing
The biggest barrier to buying a franchise is, of course, the price tag: The exact costs vary depending on the franchise, but some franchise fees are hundreds of thousands of dollars, and overall investment can easily top $1 million. Some may “only” be tens of thousands of dollars, but even that is a sizeable investment for most people. Then there are royalty fees and other startup expenses.
Why use Savadd Business Brokers and not go directly to the franchisors?
Quite simply to save time, money and potential aggravation! We provide free business consulting to help you achieve your goals. We have the experience and knowledge necessary to assist you in choosing the safest, most successful business opportunities available. Our expertise and knowledge can save you weeks or months in research time. And there is no cost to you for this service. The price of the franchise and associated fees will not be higher if you choose to use Affiliate Company Name.
Seeking financing is a common need for business owners regardless of whether they’re starting their own business or buying a franchise, and securing that financing is never easy. SBA loans, in particular, are considered the gold standard in business loans, but they require meeting stringent eligibility requirements.
Because the SBA reserves a portion of their loan allotment specifically for franchises, however, you may have an easier time of qualifying than if you were to seek an SBA microloan for starting up an independent business of your own. Check to see if the franchise you’re interested in buying appears in the SBA Franchise Directory first.
How much does it cost to use the services of Savadd Business Brokers?
You do not pay for the services of Affiliate Company Name. The price you will pay for any franchise will be the published price as if you had gone directly to the franchisor. Our franchise partners recognize the benefits of the quality and fit of a client that has been referred to them after consulting with Affiliate Company Name, and they absorb our marketing costs.
How will Savadd Business Brokers help me to find the best franchise for me?
Our goal is to find an opportunity that will meet the specific needs of each individual we work with. To do this effectively, we first have to learn what those needs are. We will ask you a series of detailed questions.
Some sample questions you will be asked are:
- What business are you in now?
- Have you ever owned a business of your own?
- What hours do you like to work?
- Where do you want your business to be located?
- How do you feel about managing people?
- How much capital do you have to start a business with?
- Will you have partners?
- Do you want to build multiple units?
- How soon do you want your business to open?
- Will you be involved on a full-time or part-time basis?
These are just a few of the many details we will discuss with you over the course of our consultation process. With this information we can match you with opportunities that are consistent with your personal goals.
Sifting through over 2,000 franchise opportunities to find the right fit for you can be a long, tedious and often overwhelming process. We have already done this homework for you.
We have pre-screened hundreds of companies from all areas of business in order to provide you with a wide variety of quality franchise opportunities. They must meet the exacting standards we have set to be included in our catalogue. We have done the work so that we can help you find the franchise opportunity that is perfect for you.
Is financial assistance available?
Financing can be a major hurdle for any potential franchisee. Start-up costs can be high and it is essential that the franchisee have adequate working capital. It is important to address any financing issues during the investigation of franchise opportunities.
Our franchise partners are experienced with this issue, and many offer financing options. We can assist you with exploring the financing options that are available to you.
Do I need specific industry experience to successfully own a franchise?
No. In fact most franchisees have had no experience in the industry that they go into. Franchisors want their business operators to focus on running the business and not performing the labor their concepts require. Franchisees are managers, rather than workers. Franchisor need people who can be effective in areas such as motivating employees, generating sales, and running the day-to-day operations as effectively as possible.
How soon can I get my business started?
This depends almost entirely on you. Our consulting process can be completed easily within a few days if you are motivated. Once you begin investigating different franchise opportunities, most clients can find a great match for them within one to three months. After you select the right business for you, it will typically take anywhere from 2 weeks to 6 months for your actual business to open for operation.