According to Statista, about 7.49 million people are in the franchise business. The famous one is Mcdonald’s. a franchise business that uses an existing firm’s model to offer services and products. There are laws in place to regulate such an industry. The franchiser provides a system others can follow to make their brand recognized.
If you are considering investing in a franchise, there are several benefits that you should take into consideration. Of course, there are some drawbacks, but the advantages outweigh the disadvantages looking at the big picture. Below are the top ten reasons why you should invest in a franchise.
- Proven Business Format
Most franchise companies offer a proven business format that has already been tested and refined for success. If you buy into a franchise, you can skip much of the trial-and-error stage of starting a new business and begin operating on day one with a plan that works.
- Name Recognition
One of the most significant advantages of owning a franchise is the instant name recognition and credibility of being part of a nationally known brand. According to the Small Business Administration, nearly 75% of consumers recognize the top 50 franchises in their industry compared to only 10% brand awareness for independent businesses.
Buying into an established brand name with a reputation for customer service and high standards offers you instant credibility with your customers. It gives you the instant recognition in the marketplace – significant in today’s competitive environment.
- Marketing Support
Another benefit of owning a franchise is having access to national advertising campaigns and marketing materials without coming up with them yourself or paying for them individually. For example, McDonald’s spent $1 billion last year on advertising, an astounding amount for any small business owner to spend on marketing efforts. By being part of a more extensive system, you benefit from national marketing at a local level.
- Related Services/Products
Because most franchise systems focus on providing one product or service, your customers will likely want other related products or services. Having additional income streams from related products or service
- Comprehensive Training From The Franchisor
The Franchisor is there to support you every step of the way – they have been through it all before and know what it takes to make their franchise work successfully. You’ll have access to proprietary business systems, procedures, and training programs that will save you time and money as you build your business.
Franchisors provide comprehensive initial training programs to ensure franchisees know precisely how to run the business, follow the system and replicate the success others are having in their stores/territories around the country. In addition, they’ll also offer ongoing support in areas such as marketing, sales, operations, management, and more.
- You Will Receive Marketing Support
You’ll have the ability to share ideas with other franchise owners in your system or through professional associations such as the International Franchise Association (IFA). You can gain from a proven method – many franchise systems have been successfully operating for years and will offer you the benefit of their experience, knowledge, and success.
- The Franchisor Will Supply You With The Correct Equipment, Furniture, And Fixtures To Run Your Business.
In many instances, they also supply you with a complete shop-fit, included as part of your initial investment. The Franchisor will have already developed an attractive store layout that draws attention to your product and encourages customers to purchase from their range.
- You Can Benefit From The Buying Power Of A Large Organization.
Franchisees can benefit from the buying power and learning of a large organization. A franchisor would have already negotiated the best pricing with suppliers, and they can pass on these savings to their franchisees, making it easier for them to be profitable.
The Franchisor may have other ways of helping you save money, such as having established a network of preferred service providers or having an in-house IT support team that all franchisees can call upon. They may also provide you with branded materials for your business that could help you attract new customers and drive sales and marketing materials that you use to promote your business locally.
- You Can Be Your Boss And Enjoy Independence
The success of your business is in your hands – if you work hard, you will reap all the rewards!
- The Franchisor Is There To Support You Every Step Of The Way – They Have Been Through It All Before And Know What It Takes To Make Their Franchise Work Successfully.
The franchise business model has been tried, tested, and adapted over time – independent businesses often have to close down after only a few years due to a lack of planning or know-how. However, most franchise businesses are still trading profitably after five years or more in business (according to the 2007 BFA NatWest survey).