I am often asked the question: What are the advantages of buying a franchise rather than starting a business or buying an existing business?
ANSWER: Buying a franchise is easier in many ways than starting a business or buying an existing business. There are many franchises in many industries to choose from. If you buy a business, you are limited to a few choices of successful businesses that are available and match your abilities, skills, experience, and interests.
The franchise is a proven business system that has succeeded in many other locations. They have proven sales and marketing systems that fit their industry. Good franchises know the customer demographics required to produce sufficient sales revenue to make the franchise successful. If the business location is important, the franchiser should be able to provide you assistance in finding the best location. Having a proven business system significantly reduces the risk of failure.
You get support from the franchiser after the purchase. The franchiser has extensive industry experience which they pass on to you. To transfer their expertise to you, franchisers must be expert trainers. Training for the new owners may range from two weeks to eight weeks and include both training at their headquarters and in your market. They provide ongoing support in training, new product development and new technology. Look for franchisers who always are evolving their system. If you start a business, you’re on your own. If you buy an existing business, you may or may not get much support from the previous owner, which should be a part of the purchase agreement.
‘Success’ usually has a higher probability with a franchise. Projecting sales and revenue is more reliable because projections are based on many previous successful new franchises. Franchisers should have good name recognition and a good track record for establishing the brand in new markets like yours. If you start a business, it can be difficult to project sales revenue accurately even when you know the business and the local market. If you buy a business, you may or may not be able to retain the repeat customers and the customer referral sources that typically generate most sales revenue.
Financing the start up cost of a franchise is typically easier than buying an existing business or certainly a start up. Lenders are more willing to lend for a proven successful business system. Since the recession many franchisers are willing to finance part or all of the startup cost which means you pay the startup costs from the franchise’s profits over several years. Also, business owners selling their businesses are now much more inclined to finance a part of the purchase price.
The most important factor in acquiring a franchise or business, is the self preparation of the buyer. If you are a “full blooded” entrepreneur, you may not be satisfied with the discipline, and adherence to proven systems required of a franchisee. On the other hand if you are not a “full blooded” entrepreneur, a franchise with it proven systems and regimentation may be perfect for you.
My workshops entitled, “How to go into Business: 8 Keys to Success” (do you know what you don’t know?) covers these topics and more. Self preparation is a key ingredient in future business success.
I provide no-cost assistance to entrepreneurs nationwide, helping them identify franchise business opportunities that match their interests, backgrounds and financial means. I offer hundreds of business opportunities in a multitude of categories.
I am an affiliate of the world’s largest franchise network with more than 25 years experience helping entrepreneurs like you find and own their own businesses.
Contact us at 888 701-6413 or email@example.com
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Franchise Paths To Success