Franchising is one of the safest ways of owning a business and becoming your own boss. It’s brand recognition, a trusted product and corporate support. Regardless, always do your research and weigh the pros and cons before jumping into any business venture. We’ll get you started with a few pros:
1. You’re Following a Proven Business Model
According to the Small Business Association, roughly 50% of businesses don’t make it past five years. Businesses fail for a whole slew of reasons. Some of the most common causes of failure include running out of capital, choosing the wrong business partners, a lack of planning and no market need or differentiation. If you aspire to manage your own business but aren’t prepared to start with a blank sheet of paper and run the gauntlet of risks involved, you may want to consider franchising. In owning a franchise, you are not only buying a business – you are buying a system that already has a history of success.
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2. You Know Exactly What You’re Getting
The uncertainty of starting your own business can be an obstacle for aspiring entrepreneurs. Some entrepreneurs are driven by risk, but not everyone is ready to take a leap into the unknown. In franchising, you know exactly what you’re getting before you buy. Franchisors are required by the Federal Trade Commission to provide franchisees with certain information, including information about the company’s officers, company history, legal history, audited financial reports, the franchise agreement and an up-to-date list of contact information for current franchise owners. Additionally, most established franchises make it easy for you to calculate your potential return on investment. This is a big perk to franchising. With this information available prior to purchasing, you know what to expect.
3. You’ll Be Selling an Established Brand
Establishing your company’s brand and gaining recognition in the industry is a difficult challenge. You could offer the best product or service, but what does it matter if no one knows about you? When you buy a franchise, you have already cleared one of the biggest hurdles in business. While a strong brand may take years to establish, most franchises already have widespread brand recognition. Having a customer base that is already familiar with your brand is an enormous benefit to owning a franchise.