Do you want to own a business and are struggling with whether a franchise is the best way to go? It’s important to understand that franchises are great choices for some people. They are not good choices for other people. Here are the pros and cons of owning a franchise.
A franchise is a proven business model to follow: This is probably the number one reason to consider investing in a franchise. A franchise is based on a proven system that has already been shown to work well when implemented. This means you don’t need to figure out what works and doesn’t work. You simply follow the system.
Specific training: Getting trained properly is important. If you don’t have past business experience, then you want to make sure you receive training that translates into success. The training here will be specific to the business you are running. This is vital because it means you won’t waste time learning anything that isn’t relevant.
Marketing help: Marketing is where many inexperienced business owners lose money. When you buy a franchise, you’ll get advertising and marketing help from the franchisor. There isn’t any need for you to experiment with your marketing budget. You can simply use what’s proven to work.
Overall Support: What happens when you have technical issues in any other type of business? You’re on your own and must figure it out. Can you imagine running a business and experiencing the entire computer system going down? Buying and owning a franchise means that you get tech support from the franchisor.
Fees and royalties: There is a one-time franchise fee you need to pay when buying a franchise. There are also ongoing royalties to continue paying out. If you buy a restaurant franchise, for example, you might experience six figure fees. It’s possible that you may see the marketing help, tech support, training and systems as positive benefits in return for the fees and royalties paid out.
Rules: You’ll need to adhere to a strict set of rules when owning and running your franchise. Remember, however, that the rules aren’t there to cause you aggravation. They are there to make sure your business operates like all the other successful franchises.
Protected Territories: There are actually pros and cons to this aspect of owning a franchise. This means you won’t have to compete with other franchises in your area. It also means you can’t open up other franchises in that area. You’ll need to buy in another territory.
Owning a franchise comes with many benefits. There are also a few disadvantages when compared to traditional businesses to think through. Take your time and make a decision that works best for your situation.