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Why Franchising

Guest post by: Christopher Nolan

Article Overview: What are the benefits of buying a franchise vs. starting a new business?

Why Franchising

Starting any kind of new business can be intimidating, scary or risky. Most new businesses fail within 24 months after starting. The biggest reason most businesses fail is because they are underfinanced or they are poorly planned. Any start-up is riddled with unforeseen pitfalls, unexpected delays, cost over-runs, legal issues, municipality compliance issues and much more. If you just don’t have the experience of starting a business, you will usually experience many sleepless nights, high tension, stress within your family, physical fatigue and even bankruptcy. Sometimes people start a business only to find out they aren’t happy with it because they find themselves working 70 hours a week for less than minimum wage while dealing with employee problems. So what can you do to alleviate these inherent issues? Consider a franchise.

While not all franchises are successful, most are. In fact over 75% of franchises are still in business five years after they open vs. 85% of small non-franchised businesses are closed within 5 years after they are opened. Franchise annual retail sales now exceeds 2 trillion dollars. So what’s the difference?

There are numerous advantages to buying a franchise. First, a franchise typically has mitigated most of the risks concerning proof of concept. The franchisor has historically proven that the concept will work and has found the majority of potential problems and the solution to fixing them. Also, because the franchisor has started to establish multiple units successfully, the likelihood of identifying needed financing is greatly enhanced. When you buy a franchise you will typically find it comes with an entire team of development and support managers together with solutions to prevent many pitfalls. Franchising is simply a financing tool for the franchisor who desires to replicate a business model to improve his ability to distribute high volumes of products or services. Yes, you are helping a franchisor grow his business, but you are also able to leverage his experience and knowledge and make enough money to create a meaningful income for yourself and your family with minimal risk. Good franchisors appreciate your confidence and willingness to help grow a successful brand and subsequently reward you with a proven formula for financial success.

There are a few other important advantages when considering a franchise. In my experience developing hundreds of franchises nationwide over 25 years, you get the next best thing to a crystal ball to discover what you should expect, here’s how. If you are believe you know the franchise you would like to own, I strongly recommend you go meet a franchisee with the same franchise concept you are considering buying and ask if you could work at his franchise for two weeks without compensation. Most franchisees will allow this if they believe you are sincerely interested. You will gain an opportunity to learn important information from the franchise owner, quickly discover many issues not previously considered and how to manage them, understand the processes, meet real customers and talk to them about why they buy these products or services to gain confirmation of your assumptions and more. Further, make the time necessary to contact as many of the franchisees in the system and ask prepared questions to further discover answers about how much money you can really make, what the initial problems were when first opened, how long it took to become profitable and many other questions.

Related Articles
  The Top 7 reasons why Franchising is Better than a Brand New Business
  I Want to Take My Business to the Next Level
  Newsworthy Trends in Franchising
  What is franchising? My personal definition!
  Franchising Is a Better Path to Success than Opening a StandAlone Business
  Fearing Franchise Losses
  Franchising Overview
  Franchising vs. Licensing
  Franchising can change the world
  FRANCHISING PERSPECTIVE
  Successful Franchisee Traits
  Financing Your Franchise Business
  ARE FRANCHISES CHANGING WITH THE TIMES?
  Franchising Can Be a Legal Money Machine
  Getting the Best Out of Your Franchise Agreement
  Factors to Consider Before Choosing a Franchise
  Funding the franchise business - franchisor
  Why Owning a Franchise is a Better Way to Business Success
  Why You Should Work With a Franchise Consultant
  Franchise Business: Right Time For Career Change?

Article Tags: business, comparisons, franchise, startup
Referred by: http://www.profranconsultants.com



Related Forum Posts
Re: Re Franchise etc - [quote="bmueller47":e0j0nu4t]Can you see a shift of various types of franchises? What I am thinking about is that today it is more difficult to create franchises, that has great appeal. More and more people want to have their business, but no interference of someone else.[/quote:e0j0nu4t] Not sure what you mean exactly but it is certain that more and more people want to have their own business but not more and more people know what they really want to do, or how to do it. And that's what franchising is all about. Franchising is not for an entrepreneur. An entrepreneur will do his own thing. People who buy franchises want a turn key business, with a proven model. Franchising in the US had never been that good. I don't have the exact numbers in mind but I know for sure that franchising is growing more and more as people are getting more and more aware of this business model.
Franchising vs. Licensing? - What is your opinion on Franchising vs. Licensing? Which is better?
Nominations for a new Franchising Moderator! - Is there anyone you'd like to nominate as our Franchising Moderator (or volunteers for the position)?
Great Article, chock full of info. - Ian, Thank you for linking your article regarding Licensing vs Franchising. Its a good read.
Re: Hello from Captain Franchise - Hi BuzzAroundBooks, I actually found the site in my search for franchise networking. We're looking to make connections and also inform the general public about franchising. Franchising is often misunderstood because of the lack of knowledge. We're here to help and learn as well! Thanks!


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