Being your own boss is a dream most people have and to fulfill that dream, buying a franchise might just be the right option for you.
With that in mind, the upstart of a business is a decision that needs to be given considerable thought. This decision can either make or break your financial and personal life. Therefore, you have to do careful research. You need to know the benefits and downside of starting a business franchise so they can be weighed carefully to choose wisely.
There are countless business opportunities, especially franchises, these days. Though the term might be new for some, franchises can be considered a safe option due to much higher success rates. Especially, if this is your first time stepping into this field.
There are many benefits if you decide on buying a franchise
These include credibility, trust among consumers, administrative and technical support, quick investment returns, and reliable management. Also, a large network of supporters and training is provided by the franchisor.
Starting an independent business requires expensive promotion and wide marketing to advertise your service/products. Yet, as a franchisee, you can profit from advertising and marketing done for you. Generally, the parent company usually takes up this responsibility.
Furthermore, well-backed franchises usually end up giving tough competition to independent local businesses. Being that, these franchises can easily promote and operate their business with the help of the head company.
Now that we have covered the benefits, it is now time to go over the downside
Some entrepreneurs find franchising as a disadvantage because their creativity is often not required and can be suppressed.
That aside, the support provided to franchise owners is very beneficial along with many franchise opportunities that can be acquired in a low-cost budget. Many entrepreneurs see franchising as a better and more profitable option than starting a company of their own.
Weighing both the advantages and disadvantages of buying a franchise is essential before taking the big leap of buying a franchise for the novice entrepreneur.
According to the International Franchise Association (IFA), there are more benefits and advantages of buying a franchise. Some of them are as follows:
1. Higher chance of being successful with buying a franchise
Many independent businesses fail because of nil support. Whereas, franchises can sail through and have more chances of success because of an established support system.
2. Reliability among clients
Reliability and trust of the brand among the clients comes along with buying a franchise regardless of marketing, promotion and location.
3. Training and support
Franchisees are usually provided with constant support and training programs. They receive this even before and after the franchise starts running with networking, meetings, additional training programs and research and development, etc.
4. Benefits Of Purchasing Power
Due to insufficient resources needed for extensive advertising and inventory, many independent owners suffer. On the other hand, as a franchise owner, you get access to the franchisor’s purchasing system. This can leverage outlay and increase the chances of multiplied return on investment.
5. Help Of Experienced Parent Company
Franchisees often benefit from the experience of their parent franchise. In turn, they minimize risk while buying and running a franchise. In addition, there is access to proven systems of business models. It also helps avoid and deal with common mistakes.
The downside of buying a franchise
Before jumping on the wagon of buying a franchise, there is the downside that you might want to consider.
1. Doesn’t eliminate risk
Though franchising can minimize the risk of business ownership, it does not eliminate it. Hard work, determination and constant improvement are all major factors that can result in the success of any business franchise.
2. Brand recognition
Brand recognition can have both positive and negative results in the world of online franchising. Clients can either trust or turn against a brand because of one positive or negative review.
This is the case whether the negative feedback was on a certain franchise or another. All franchises suffer or benefit as a chain reaction because of one such franchise. As such, this can be a major downside at times.
3. Curbs creativity and independence
Franchises, as proven business models, have major benefits but there can also be a downside. For one thing, buying and running a franchise has creative limitations for entrepreneurs. Thus, they cannot follow his/her will to implement creative ideas because the franchisor requires you to follow their set rules and regulations.
4. Managing skills
Buying a franchise requires business management, development and human resources. This is true even though they don’t require you to have any certificates or prior experience. But you will need to evaluate yourself for potential managing skills. Besides, you want to be able to measure your success in the field.
So, while you consider buying a franchise, it is essential for you to honestly review your capabilities, pros and expertise. You have to see if you are up to the challenge of running a franchise business successfully and efficiently.
5. Unrealistic expectations when buying a franchise
Many franchises promote themselves as a “get rich quick” opportunity. This is not the usual case. No business can earn multiple profits in a short time. Granted, these unrealistic expectations and assumptions must be realized while buying a franchise.
Determination, patience, hard work, commitment and good management skills are essential qualities required in an entrepreneur. This is true whether you run an independent business or a franchise. Therefore, do not expect “Quick Money” while getting into the franchising business.
Buying a franchise proves to be an excellent opportunity for success though they do have a downside as well. A thoroughly researched decision weighing both benefits and the downside, equally, will help you decide if buying a franchise is the right business for you.