Dec

Start A Franchise? The Magical Business-In-A-Box!

By emily

Many aspiring business owners opt to invest their hard earned money and start a franchise because they want to short-cut the learning curve between starting a business and making in profitable. When you buy a franchise, you are buying someone’s proven business systems and brand identity to get your restaurant, gym, office supply store or tutoring center off the ground quickly!

Many people like the idea of starting a franchise to save time, or, if they are a true entrepreneur who has built a successful business form the ground up, they may decide to franchise out their business model to help it spread around the country.

If you’re looking at starting or buying a franchise, it’s important to remember that while you are reducing risk in some areas by going with a proven business model, you are creating a lot of risk in the financial outlay most franchises require you pay in order to become a member of the team.

Sometimes you can get just as far by starting a business on your own without the cost and bureaucracy of a franchise model. Not all franchises are equally strong, and what did well and was rated the best franchise five years ago, may not still have a positive economic outlook. Also, sometimes franchises can be hard to sell, so the exit strategy isn’t certain.

Plan ahead and procede with caution if you are seriously considering buying a franchise.

Why Start a Franchise?

Tired of being displaced as an executive or dissatisfied with how the company is being run? Thinking about going into business for yourself? It can be a little sobering when you think of all the horror stories that the Wall Street Journal and the USA Today publish on the failure rate of independent businesses. Yet, despite these statistics, every week there are many companies that are offering franchise opportunities and a chance to be self-employed. Yet, why start a franchise? What does a franchise have to offer that other lines of businesses do not?

Franchising is a business strategy that allows one to invest his or her assets in a system to utilize the brand name, its ongoing support and the operating system. This joint commitment allows one to distribute products and services under an already established image. The goal of a franchise is to get and keep customers and it legally binds you to use the prescribed marketing and operating systems in place while running your business under the brand name. Increasing the value of a brand name is the shared responsibility of both the franchisee and the franchisor. In order to start a franchise that is successful, you therefore need to avoid the ownership mentality since this will destroy you’re the reason for the franchise in the first place.

Turnkey operations, commonly applied to franchises demand that a seller put up a plant or business with his or her own financing while the manufacturer delivers the complete, installed and ready to use product or service to the individual either as a lease or as a sale to run his or her own venture. If you plan to start a franchise as a turnkey operation, this may require a big project to assure the buyer that you as the seller have the financial and technical capabilities to undertake such as project. The purpose of the company franchising is thus to replicate its successful operations without significantly increasing its debt and investments.

When you start a franchise, you stand a better chance of succeeding due to fact that you already have an established customer base, you have less risk and you can open quicker and thus experience success sooner. The proven success of your franchisor will determine your success as well as the success of other existing franchisees. Since Americans are a people of habit, brand-driven, they trust brands that they see and this loyalty, when delivered the same way all the time will almost guarantee you success should you decide to start a franchise.

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