Is A Franchise Business Right For You?
Picking a Franchise Business
This is a question that does not have a definite answer. You have to decide for yourself. We have outlined the key advantages and then the top disadvantages of doing business under franchise to help you.
Reasons to Buy a Franchise
Franchises offer a ready structure upon which you can start, manage and grow a business, without having to start on your own from scratch. There are many reasons why purchasing a franchise is the best decision for you. Here we list some of them.
1. Brand Trust
Most franchise businesses are legacy businesses. That is, they have existed for quite a considerable amount of time. We have some that have been in business for decades – and a few, for centuries. During these periods, they have built trustworthy businesses that customers have come to accept and love over time.
When you sign up as a franchisee with these companies, you simply key into this existing brand trust and customer loyalty to grow your own business. This way, you get to scale through the first hurdle on your way to business success, building customer trust. Trust is one of the principal factors that push customers to buy from a brand. With your franchise already having that brand, you can then develop and grow the business properly.
2. Proven Business Model
Most franchisees are usually successful businesses that want to give others the ability to be a part of that success. For these franchises to have been successful, their business models have succeeded in the market. Since you will be keying directly into the business, it means that you do not have to start proving any new business model. There is already a business model for you to key into.
3. Business Development
The top franchisors do not just leave their franchisees to figure out the business by themselves. They invest in helping the franchisees get established in the business, preparing them for eventual business success.
There is usually a training process the entrepreneur has to undergo when they sign up. They then get to learn about all the moving parts of the business. This ranges from the technical parts to the finances and overall business management. Furthermore, most times, the franchisors do volunteer to help you take on marketing, all for very cheap costs. Bearing that they are industry veterans, you can rest assured that the marketing process will deliver useful rewards.
Then, franchisors appoint business managers to work closely with their franchisees, offering some form of ongoing business mentorship. You have access to none of this if you choose to run the business yourself.
Reasons Why You Should Avoid a Franchise
While the franchise structure may look attractive, it has its downsides.
1. They are Restrictive
There are a lot of restrictions that come with running a franchise business. The agreements are usually rigid. Most times, you have to stick with the business model of the company no matter what. One of those restrictive factors is the business name. Even if the business gets a negative reputation due to no fault of yours, you still get to keep the name.
2. It Is Not YOUR business
You are essentially borrowing the business name for a few years. After the agreement’s expiration, you may renew, or you have to change the business name.
3. You May Be Affected By Other Franchisees
There are cases where a fellow franchisee commits acts that bring about a negative reputation to the entire business. As a franchisee under the business, you have to deal with this even if you are not responsible.
From the above, we can say that to answer the question, “is franchise business right for me?”, one will have to look at both the pros and cons and balance them against one another.