When you're thinking about starting your own business it often seems more appealing to create your own completely new business than to join a franchise group. After all, joining up with a franchise means you still have to follow somebody else's rules. Yet there are many benefits to owning a franchise business which usually outweigh the loss of freedom.
Here's why you should consider joining a franchise group instead of striking out on your own:
1. Use an already developed system
Yes, you do have to follow some franchise rules (and some franchises are stricter than others), but you also get to work with an extensively developed system. The franchise already has mechanisms in place for things like product or service delivery, staff recruitment, advertising, billing, shipping and training. In many cases, the ongoing franchise royalty paid to the Franchisor is more than offset by the time and costs savings of plugging into proven systems. After all, time is money!
2. Have a built in reputation
A franchise will already have an established reputation which you can take advantage of. The Australian population is very aware of franchising as a business model, with well over 1000 franchise groups in operation, according to a 201 study. Because of the group branding power provided by franchise chains, people from other neighborhoods and even cities are often more likely to come into your franchise because they recognize the brand and know what to expect.
3. Get training
Most franchises offer an initial training period of at least a few days where they walk you through how to use the various systems and how to train employees. The training will also often include field placements where you can actually experience the business in full operation prior to starting your own. This gives you an edge when you're just starting out, especially if you've never started a business before. You may also get access to further training at discounted rates.
A fantastic example of thorough support for Franchisees is the PoolWerx support system for new and existing Franchisees. Their comprehensive training program includes general business training and industry-specific training, delivered in both in-person and online formats.
4. Have a community
Becoming part of a franchise gives you access to the franchise community which is filled with people who have far more experience running a franchise than you are. Most of these people are willing to answer questions and help you get your business off the ground. Running a business can be a challenge, so having peers that are going through the same challenges as you, many of whom have likely conquered those same challenges and can offer sound advice, is a huge benefit over a stand alone business.
5. Have a distinct business area
Most franchises have strict rules about how close together their restaurants/stores can be placed, so you know you'll be the only person from your franchise system selling the exact thing you're selling in your neighborhood.
6. Get more access to funding
Since franchises already have a successful brand, lenders are often likely to be more forthcoming with business finance for your investment. Some groups even have strategic finance arrangements in place with existing suppliers to allow you to fund your plant and equipment costs. Fitness franchise group EFM Health Clubs for example, assists new and existing franchisees with generous payment terms for gym equipment fit out and this shaves a significant amount off of the upfront capital required to get started.
7. Expand more easily
As a successful franchise owner you can position yourself to become a multi-unit franchise owner and take advantage of new store openings as they arise. Many franchises also have special programs designed to help people expand their number of locations quickly.
Summing Up
Starting a Franchise involves an upfront fees and ongoing franchise royalties, but the overall cost-benefit ration is typically very much in the Franchisees favour in terms of the benefits provided as a member of a franchise group vs going it alone as an independent business operator. Of course, being a franchisee isn’t for everyone, so it pays to do plenty of research about which type of business model is most suitable for you.
Author Bio
Greg Nunan is a former co-owner of a leading fitness franchise chain, four times recognised inside Australia’s top 30 fastest growing franchise groups. Nowadays, Greg divides his time between online marketing consulting to companies, assisting individuals to invest in online properties and Greg also helps provide exposure opportunities for rising startups via his blog, New-Startups.com.
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