Buying a franchise is a promising business idea that provides you with a great opportunity and a head start in so many different aspects of running a business. You get to skip a lot of formative work, like coming up with some brand markings, developing a business model, etc. This alone provides you with an immense amount of help during the formative years of your startup. However, a lot of people think about the idea of being a franchise owner without fully understanding all that this actually entails. With that in mind and without further ado, here are six things you need to know before becoming a franchise owner.
1. Your chances are greater but the success is not guaranteed
The first thing that everyone tells you about being a franchise owner is the fact that your chances of making it are somewhat better than if you were to run an independent business. After all, you receive training, support and connections, as well as a tested business model to follow. This alone should be enough to give you a head start against others in the industry. Still, there’s still so much for you to do and your success is all but guaranteed.
2. You don’t have to mimic the franchisor
Keep in mind that you have a great amount of intellectual freedom and aren’t necessarily bound to mimic the franchisor in every way possible. You’re required to fire business model in some matters, especially when it comes to retail and similar major objectives but you have a huge degree of freedom in many other aspects. How you run your local business is up to you, as long as you stay within the bounds of the pre-set general business plan. This, however, is something you need to discuss with your franchisor before you buy.
3. You’re limited to a certain territory
One thing you need to know about owning a franchise is the fact that you can’t expand indefinitely. You’re only allowed to grow within the bounds of the territory that you’ve bought the franchise for. However, this is not always a negative thing. You see, this territory is yours alone, which means that the franchisor can’t sell another franchise on your turf. This alone helps you avoid some tough local competition.
4. Your professional growth is not limited
The main reason why so many people refuse to buy a franchise but decide to run an independent business is due to the fact that they believe that their potential for growth will be limited by the franchisor. In their mind, they’re only allowed to grow as much as their franchise allows them. However, those who are the most ambitious can opt for a different path. What they could do is buy a master franchise of a certain region and sell local franchises to others. In this way, they will become much closer to a franchisor than they are to a franchise owner.
5. It’s much easier to acquire funding
Previously, we’ve mentioned that as a franchise you’re more resilient to failure. Well, this is information that potential investors are familiar with as well, which will make your job of persuading them much easier. Also, as a franchise, you get more value for your money’s worth. When you buy a franchise, you also get some brand markings for free (which you would otherwise have to pay for). You also don’t have to start from zero when starting a marketing strategy. Other than this, you get some training and guidance, all of which you would, otherwise, have to provide on your own.
6. Your business will have a great degree of independence
The last thing worth mentioning is the fact that just because you’re not the owner of the business in a traditional sense, this doesn’t mean that you don’t have a huge deal of independence. In theory, a franchisor can decide not to renew a contract but unless there’s a massive disagreement between the two of you, this is quite unlikely to happen. In other words, even though you’re not the one to pick all the brand markings for your business, you can still run the business like you’re the owner in almost every aspect.
Once you know all of this, you’ll be able to make fact-based decision on whether you should buy a franchise or not. Making this decision without considering all that this entails is irresponsible and even outright dangerous. Fortunately, there are so many online resources on this topic that you lose any excuse when it comes to the execution of this issue.