1. Build a Business Yourself or Join a Franchise Organization?
Below are the key reasons why joining a franchise organization can help you achieve your goals faster and with dramatically lower risk. A good, reputable franchise organization has already worked the bugs out of its business model. That almost always saves you time, money and a great deal of stress and grief. Set up a call with me if you’d like a deeper dive into any of these key franchisor benefits.
2. With a Proven Concept, You Assume Less Risk
Planning, startup and operating any business venture carries risk. In franchising, it’s a calculated vs unknown risk. As part of your due diligence you’ll get real metrics about the franchise: how many franchise owners joined your franchise of interest the previous year and how many left. Even better, you’ll make validation calls to these current or past owners for “no holds barred” conversations for their unvarnished opinions.
3. Franchisees Gain Easier Access to Financing
Lenders like to look at a franchise system’s track record when you apply for financing. The key word is track record. If you attempted to start a business on your own, you likely won’t have a demonstrated track record for your idea. You do with a proven franchise system which makes the loan process easier for you.
4. Brand Name Recognition is Worth Its Weight in Gold
Having a brand name behind you that you can leverage can be invaluable. A strong brand name can often drive business to you immediately after you launch your franchise.
5. Imagine Tapping the Collective Knowledge of the Franchise for Ongoing Support and Mentoring
Chances are every question and every challenge you encounter has been answered or overcome by one of your fellow franchisees. When you franchise it’s not a set and forget it environment. Good franchisors provide world-class ongoing training and support for their owners. Depending on the size of the organization, it’s not uncommon for them to assign you a franchise business coach/consultant. This person acts as a liaison between you, your business and the corporate franchise support center.
6. Group Purchasing Power Keeps Costs in Line
Franchisees often benefit when it comes to cost of goods savings and other group purchasing power opportunities. There’s strength in numbers and the franchisor often extends this benefit to its owners which can boost your profitability.
7. Camaraderie…Without Having a Boss
As a franchisee, you’re an independent business owner. You don’t have a boss because you’re the boss. You can however, interact with your franchisor and fellow franchise owners and benefit from successful shared experiences and practices.
8. On-going R&D Keeps Franchise Brand Concepts Fresh
Research and development can be quite expensive if you were to attempt to open your own solo business. A good franchisor is constantly investing in on-going R&D to benefit their owners to keep their products/services fresh and keep their operations up with the times.
9. Legal Compliance Services So You Can Focus on Operating Your Business
A franchisor overcomes great legal hurdles simple to begin offering it franchise to the public. Legal compliance never ceases. The franchisor strives to always remain compliant and not put their owners in harms ways legally.
10. Co-op Advertising Provides Proven Traffic-Building Programs
Some franchisor’s offer co-op advertising (print, online, direct mail, telemarketing, messaging, etc.) for the franchise owners. For a fraction of the cost, these proven programs provide an incredible “win/win” for the franchisor and you, the franchisee.
11. Site Selection Assistance/Market Analysis Establishes you in the Best Location Possible
How do you know if there’s enough demand in your geographic area of interest for the franchise? How about where to open a location? Many franchisors use either a 3rd party Geographical Information System (GIS) vendor or they have their own GIS staff in-house to conduct these important analyses on your behalf.
12. Building Equity
As part of your exit strategy you should think about what it might look like to sell your franchise one day. How much equity have you earned over the years? Will you build up more equity owning a franchise versus starting up your own business? Will it be easier to sell your own start-up or a proven franchise? The most important takeaway with either is had you not opened a business you couldn’t have built any equity in the first place.
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