Buying a franchise can be a great alternative to starting a business from scratch. There are many advantages of buying a franchise which can make it a better business model than starting your own small business.
However, the decision to buy a franchise or start a business has its upsides and downsides that are ultimately your responsibility to research. It’s important to consider the pros and cons of franchising before investing in one and to weigh this up against alternative business models.
Franchising can be a great small business opportunity housing the ability to buy into prebuilt brand recognition thus lowering the risk of failure. As long as you have a way to fund your franchise purchase there is very little risk or uncertainty.
In this article, we will cover 6 reasons that buying a franchise may actually be a smarter move than starting your own business. Many people have the idea that franchising is strictly a concept for fast food businesses, but that’s a common misconception. There are many other industries that have found success with franchising, including health, wellness, and fitness.
Now, let’s move onto the 6 reasons why buying a franchise might be better than going out on your own and starting a new business from scratch…
Reason 1: Reduction in Risk
The reduced risk is one of the key advantages of buying into a franchise, provided that the brand has a healthy reputation and you have the means of purchasing the franchise. This reduction in risk is the result of a pre-established and often well-recognized brand with a proven franchise system in place.
Buying a franchise from a reputable, strong company can also offer you additional resources and ongoing support that simply wouldn’t be available to those starting a business from scratch.
Reason 2: Ongoing Support, Advice, and Training
If you choose a good franchisor, they will want to see you succeed. Providing ongoing support in key areas such as marketing can help you set up and get selling quickly, something that starting your own business would take time to implement. What’s more, a good franchisor can give advice and training in these key areas. For example, offering training courses and allowing for regular communication can be a huge advantage in buying a franchise.
On the other hand, the choice to start your own business will require you to piece together your own training and resources. A process that can be time-consuming and require a lot of money.
Reason 3: A Turnkey Operation
Before buying a franchise it’s important to note the level of commitment you will be able to put in. A major advantage of buying a franchise over starting a business is the turnkey nature of many franchise opportunities. The ability to have everything you need set up and ready to start selling with the “turn of a key”. This can make starting a franchised business much simpler and faster, particularly if it is a home-based business or requires only a small fee to set up.
Certain turnkey packages can provide you with everything you need, including know-how on finding a site, signing a lease, hiring, training, and supply chain. Many franchise opportunities offer packages similar to this which are partial turnkey and do many of the things above but offer a bit more independence in the decision-making process.
Reason 4: Brand Recognition
When buying a franchise, you will have access to the authority of the brand, a huge leverage point when it comes to your success. This is another reason why investing in a franchise offers a reduced business risk (reason 1). Buying a franchise allows you to tap into the brand and its customer base. For example, if buying a popular gym franchise or restaurant franchise which successfully advertises and has a name for itself, you’ll be in a much better position to start selling.
Reason 5: Financing
Getting a loan for a franchise business is often far easier than getting a loan for an independent startup. Buying a franchise allows you access to easier financing from a bank that will likely deem your franchise business as less risky. As a franchisee, you may also benefit from better agreement terms.
Reason 6: A Faster Path to Success
Starting a business from the ground up can put you at the mercy of the many trials and tribulations that come with a startup. A new business concept can often be a huge learning curve in both time and money.
Buying a franchise, on the other hand, makes things far simpler. A franchise will allow you to enter a proven system capable of driving sales from the get-go. This proven system can aid with marketing, finance, hiring, and many more components a standalone entrepreneur would have to face with little assistance.
All in all, when buying a franchise, you must understand all key components along with the basics of franchising to best set you up on your path to success.
Buying a franchise can result in less risk for the business owner in comparison to going out on your own and building a business idea from the ground up. However, it’s vital you know the different types of franchise options available to you along with the pros and cons of franchising so you can truly see for yourself whether this business model is for you or not.