The journey to becoming the boss isn’t easy. Hopes and dreams of running your own business often pale in comparison to the worry and stress that go hand in hand with being an entrepreneur. But what if you could have all the benefits of being a business owner with the support and backing of an established company? Well you can, and if this sounds appealing, then opening a franchise might just be the right decision for you.
Franchising provides people (or franchisees as they are known) with the opportunity to run their own business with the help and support of a bigger company that has a proven record of success. Of course, this doesn’t mean that opening a franchise is easy with a guarantee of making a profit, but for many wannabe business owners, franchising is less risky, but just as rewarding, as starting an independent business.
Here are five good reasons why opening a franchise is a great alternative to starting a business from scratch.
Franchises offer you independence with guidance
Starting a business can be daunting, but knowing that you have the support of a reputable franchise system allows you to take the first steps into business ownership with confidence. This is what makes franchising so appealing and research published by the British Franchise Association (bfa) confirms that the franchising sector is growing. In fact, the 2016 survey found that the number of franchisee-owned businesses has risen to 44,200. That’s an impressive 14 per cent increase in the last two years.
You don’t need business experience to run a franchise
One of the key benefits of the franchise model is the amount and quality of training and coaching that is on offer. It’s in the interest of a franchisor to invest in their franchisees so comprehensive training programmes are provided at the start, and throughout the franchise journey. This support is appreciated by franchisees too, with 91 per cent surveyed by the bfa stating that they are satisfied with their franchisor. Franchisees should never feel like they’re alone while building and running their franchise business, so advice and on-going support is always available.
Finance may be easier to secure
Financing any new venture can be a concern for start-ups, but securing funds for a franchise may be easier compared to an independently run business. This is because the business plan produced by franchisees can be completed with accurate financial projections based on the franchisors experience, which makes applying for a loan much more straightforward. The history of a franchise is hugely credible with banks and takes the guess work out of the finances, which is why franchises are often viewed as a safer investment.
And the numbers speak for themselves, the bfa confirms that a record 97 per cent of franchisee-owned businesses generated a profit in 2016, with 56 per cent saying they are ‘quite’ or ‘very’ profitable.
Immediate brand recognition
Starting a business always has an element of uncertainty. However, franchisees can mitigate much of the risk associated with being a business owner by becoming part of a brand that has an established customer base. Although it’s true that different franchises will have different levels of brand recognition, knowing that customers like the brand which has been successful elsewhere provides a much-appreciated safety net for franchisees.
Franchises have a higher rate of success than start-up businesses
Starting and owning a business is like being on a rollercoaster of emotions. From the highs of recruiting new staff, to the lows of losing a contract, the excitement and challenges are constant. Unfortunately for many business owners’ failures will happen which cost money, time and energy. In some circumstances, this can lead to the need to sell the business.
The benefit of opening a franchise is that mistakes that lead to failure can be avoided because the franchisor will have made these before you (and have learnt from them). You won’t have to sell an untested idea or product in an uncertain marketplace as the franchisor has done all the hard work for you. This means that ownership changes of franchisee-owned businesses are extremely low and, in 95.4 per cent of cases, the same franchisee continues to own and operate the business for the term of the franchise agreement, and beyond.
So, when you open a franchise, you pay a fee and the franchisor supplies you with the products, training and support you need to run your business. It’s a simple business model and the benefits make it a compelling choice for budding entrepreneurs. But where should you look for franchise opportunities if you’re interested in becoming a franchisee? Well, Point Franchise is a great place to start. You’ll have access to all the insight you need to be able to make a considered and educated decision as to which franchise is the best for you. You’ll also find in-depth articles, breaking news bulletins and advice from our team of experienced experts, so that you can understand more about the franchising and how it could be perfect for you.