You’ve always dreamed of owning your own business but don’t have a clue where to start. Franchising could be a way into becoming a business owner without having to figure out all the operational procedures, business and marketing strategies and while receiving the use of a known brand such as Subway or Burger King.
A relationship is established with a successful business so you can use its systems and capitalize on its existing brand awareness in order to receive a quicker return on your own investment.You are using a proven system and name, and running it by its rules – a tried and tested business model.
A licensing fee is paid to purchase the given territory and the name. Based on the brand name, this could be thousands of dollars. Ongoing royalties are also paid based on sales. Franchisees are put through training to learn how the franchise system works. Depending on the franchise, there could be vendors that you are required to purchase supplies from, advertising you need to pay into and strict guidelines as to how you are to run your business.
Look at McDonalds, it doesn’t matter where you go in the country you have the same food experience, milkshakes and hamburgers are made the same. However, if you buy into a younger less established franchise, they may not have all their processes or vendors fully established. There may be more flexibility in how you can run your business.
A good franchisor will provide ongoing training on new products and upgrades in processes.Are you still your own boss? In some respects, no. You still have to answer to someone else and follow his or her direction. You don’t really own the business; you own the assets you’ve purchased in order to establish the business. If you are a headstrong person who wants to run a business your way, then it may be time to rethink purchasing a franchise.
Although some people think they are buying a business in a box with a franchise, it still takes work to become known in the community and to establish business relationships with those that can support your business.
Do your homework on a franchise before taking the leap into business ownership.Determine if you are the type of person who can follow the rules and procedures associated with the franchise. Understand all associated costs before pulling the trigger on buying a franchise. Once those questions are answered, there are thousands of different franchises out there. If you’re buying a business, be sure it is something you are passionate about and step into business ownership.