Is a franchise the way to go? With the state of the economy today, more and more people want to open their own businesses. Unfortunately, the chances of an independent business succeeding are low; in fact, 70 to 80 percent fail in the first few years for many reasons, namely inexperience. There is a cure for this, and it is called franchising.
What is Franchising?
Simply put, franchising is one method for a company to expand its business–it is a marketing tool. Whether it be a small company such as an air conditioning business, or a large corporation such as McDonald’s, it is a way for these businesses to earn money and a way for you to become a business owner. The company gives you the license and rights to sell its products and services and depending on the contract, you have to pay them a certain percentage of your gross sales to the company.
The Benefits of Franchising
A franchise is a blueprint for success. You are operating a proven system. Training, suppliers, and vendors are already set up for you. Step-by-step instructions from hiring your employees to paying your bills is all outlined for you. Another benefit is the constant support the franchisers continue to give.
Unlike the failure rate of independent business owners, the success rate of franchises is 80 percent. First and foremost you avoid the trial and error period all new businesses experience. This is due to the training and mentoring you receive from the company you purchase the franchise from.
You have an opportunity to manage a business that already has a proven track record for success. Using their name and making this business your own sets you up for the cash flow you have waited for. Using a recognized business name gives you better marketing results. You are provided with the marketing tools necessary to promote your business.
The Benefits of Mentoring for Franchising
Mentors and coaches benefit you by teaching you everything you need to know about running a business. Although mentoring is not necessary for you to succeed, experience is the best teacher. A mentor can teach you what they have done in the past, the mistakes they have made, and what they finally found that worked for them.
You can also tell them your new ideas and see what their thoughts are, or how to mold them into something that might work better for your particular franchise. One of the biggest benefits of working with a mentor is cutting your start-up costs. You can discuss what equipment you may need and how to actually set your business up. Your mentor can help you modify your plans and save you money along the way.
The Costs Involved
No matter how you look at it, there are costs involved when opening your own business, albeit independent or franchise. The costs for a franchise depend solely on the type of franchise you wish to open. You can do something as simple as a pet care company, or something more complicated like a fast food chain. This means entry costs can range from $1,000 to $250,000 or more.
You may also hire an attorney to handle all legal issues such as the contract between you and the company you are buying the franchise from, and the royalties owed to the company itself, which generally range between 4 and 8 percent.
Although the process of franchising may seem overwhelming, its benefits far outweigh the risks. It provides you with an almost guaranteed way of turning a profit quickly and easily and a means of recouping your initial investments sooner than if you open an independent business. It is most definitely worth the time and effort.
1 thought on “Choosing a Franchise Is a Blueprint For Success”