A ready-made business allows you to forget all the pain and suffering of a start-up. Asking for a loan or financing for a start-up requires many steps that franchises seem to skip over. Asking an investor or a bank for a loan has several requirements before you will even be considered. You need a business plan. This plan will also include market research, financial projections, and many other details that are not required with a franchise opportunity.
One of the main benefits to owning a franchise is access to a tried-and-true working business model. Often, you will be trained in the business model and classes for additional training are usually offered. The main company wants to see all of their franchises succeed. They will do whatever it takes to see that you are successful in your new franchise opportunity.
The next benefit to owning a franchise is branding. The more well-known the brand is, the easier it is for you to become an almost instant success with your new business. Branding takes time of you are starting your own small business. With a franchise, the branding is already in place and allows you to get right to making profits.
Aside from training, most franchises get their supplies from the mother company. Whether you are starting a fast-food franchise or a cleaning business franchise, you will most likely get your products discounted from your main company’s warehouse. You supplies will be far cheaper than the counterpart small business owner who struggles in the beginning to find suppliers, and often at a higher cost.
Buying a franchise can help you save money on advertising. For the new small business owner, advertising becomes a hit and miss game until the game is finally learned. With a franchise, you can put their advertising know how right to work. A franchise’s methods are tried and true and easy to replicate, saving you headaches of the hit and miss game.
Many people dream of being their own boss but don’t want the headaches of starting a new business from scratch. Franchises allow you to explore a possible new career or make your business ownership dreams a reality.
Franchises still require start-up capital. This could be a real downside as you will be required to have those finances available and up front. Starting your own small business requires capital also, but you can start smaller thus spending less in the beginning. Here are some of the things that will be required of you if you decide to go with a franchise. You may be required to have potential partners to make the initial investment. It could be up to 1 million dollars required, depending on how popular the brand is. You will also be required to have a minimum net worth to even begin to engage in the thought of owning a franchise.
One of the biggest cons to owning a franchise is your reputation is not only tied in with the main company’s brand, but also the main company period. If there is any kind of fraud, arrests, or even financial trouble at the main company, it could cost your franchise in not only business, but profits.
One of the biggest cons against owning a franchise is that you have to play by the parent company’s rules. This lack of freedom is what prevents many potential business owners from investing in a franchise. Often, the parent company micromanages the franchises and has strict rules for advertising, hiring employees, and even how the business functions.
Franchise fees have to also be taken into consideration. Fees vary from franchise to franchise, but essentially, you are paying for the business and advertising model, along with cheaper supplies and the training. Nothing is given for free in a franchise. The same holds true for the small independent business owner, but the small business owner likes the freedom to change in any direction the business warrants.
For a ready-made business, franchises are the way to go. For the freedom loving hard working small business owner, they love the challenge of a new startup and the freedom that goes along with it.