Is this an easy way to start a business or are you buying trouble, we take a look at some of the pros and cons of using buying a franchise.
You skip some of the startup stages
When you buy into a franchise all the market research, minimum viable product creation, testing, business plan creation, and other groundwork has already been done for you. All you need to do is apply their frameworks to your market.
Instant brand recognition
Franchises come with a pre-built name and loyal customer base, saving you the painful labour of establishing your brand. This bypasses a lot of the work that goes into marketing and branding, so you can concentrate on bringing in customers and prospective employees from day one.
Collective buying power
Franchises will have established deep-rooted relationships with suppliers, so materials may be less expensive.
Franchises are a more secure investment than new businesses because they have the support and backing of a larger, established corporation. These corporations have business models that have been tested, often in different markets and have already proven themselves to be effective. This may mean that getting business loans will be easier than if you had started an independent business with no prior track record of success.
Be your own boss
Owning a franchise means you can create your own schedule, have more autonomy over our career, and even work from home if the type of franchise you have allows for it. You also have a support system of other franchise owners on hand to help if need be.
The initial investment can be quite high
Depending on the franchise, the initial buy-in can be high, especially for the big-name franchises. There are also franchises that are affordable for any budget. Do your research and find out what the monthly royalty fees are and how much that’s going to eat into your profit potential.
Abiding by the franchise’s rules
For all that you are your own boss, you still must abide by the systems that are in place and the directives of the franchise. This leaves little room for innovation or creativity.
Reputation management issues
No matter how well-run, efficient, and well-liked your franchise is, it’s still tied to the national franchise, and when scandal hits at national office or at another franchise, your business can be affected.
Contracts with the franchiser aren’t permanent, and the franchiser can decide not to renew yours. Similarly, a long-term contract that you are having difficulty with may be forced to continue to term, despite your desire to exit the deal.