Buying a franchise is an enticing prospect for aspiring business owners. From fast food to retail salons, fitness groups or even travel agents, franchises come in all shapes and sizes.
Find the right opportunity and you could be on your way to being a profitable small business owner. However, not every franchise is a success, so let’s take a look at the pros and cons of buying a franchise business.
1 Established brand
One of the hardest parts of starting a new business is getting your name out there and developing your brand. When you buy into a franchise, the hard work is already done for you. You have a name and brand that is known in the market and has already proven to be a success.
2 Systems in place
Your franchisor knows what it takes to get the business up and running, which means you get to reap the rewards of someone else’s hard work. Usually all the systems are already in place, including the technology to make the business function – that’s a gift in itself.
3 Support and training
Most franchisees will receive adequate and ongoing support from their franchisor. This is priceless if you’re a new business owner still learning the ropes. You and your employees will have access to regular training so you can be fully confident in the day-to-day running of the business.
4 Franchisee network
If you choose to buy into an existing franchise, you will have a wealth of knowledge at your fingertips. You will have access to a network of franchisee owners who are tackling the exact same challenges as you. Ask questions and learn all you can from those who have done it before.
1 High start up costs
There’s no denying that buying a franchise is expensive. While the cost varies for each business, you will be paying a pretty penny for someone’s else’s successful business strategy. The question is – is it a worthwhile investment?
While there are distinct advantages to buying into an established brand, there are also very real restrictions. Most franchises will have strict rules and guidelines when it comes to the store set-up, collateral, and how the brand is represented. This can be frustrating for innovative entrepreneurs.
3 Marketing costs
Since all franchises are operating under the same brand, there is usually one point-of-call when it come to marketing and advertising activities. This means, you will be required to pay a fee, often monthly, to contribute to these activities – whether you feel it benefits your business directly or not.
4 Limited creativity
If you’re a creative person who always wants to change and improve how a business is run, you might find owning a franchise too restrictive. There are often quite strict limitations when it comes to changing any part of the business model and you’re expected to always play by the rules.
Find out how QuickBooks can help you run your franchise business.