Tweet

10 Reasons to Buy a Franchise

Written by: Peter Casey

Article Overview: 10 Reasons to Buy a Franchise. Are you thinking about buying a franchise but you're not sure if the idea is a good one? Here are ten good reasons to go ahead and pursue your dream of owning a successful business.

10 Reasons to Buy a Franchise

10 Reasons to Buy a Franchise
Are you thinking about buying a franchise but you're not sure if the idea is a good one? Here are ten good reasons to go ahead and pursue your dream of owning a successful business.

1. Proven business: Opening a franchise comes with the advantage of knowing that this business has been successful in other locations. The idea and process of running this business have already been proven. Therefore the learning curve in operating the business can be virtually eliminated.

2. Lower risk: Risk of failure is lower with a franchise than starting a brand new business. There is a much higher likelihood of success if the same business has done well in other areas.

3. Established customer base: The brand name that comes with the franchise is already recognizable to consumers, without the franchisee (purchaser) having to spend a lot of money and time in establishing a new brand. The brand awareness provides security and trust to the customer who expects uniform quality to be provided. Therefore a customer base is already established.

4. Marketing: The franchisee can benefit from any advertising or promotion that the franchisor (owner of the franchise) does at the national or local level, without absorbing the cost. The franchisor can also provide input to the franchisee on a local marketing plan.

5. Initial and ongoing support: Training and support is usually part of the deal. Since the franchise company has a vested interest in how well you do, ongoing training, system upgrades, product enhancements, and question and answer resources are provided. The franchisor offers experience to franchisee in such areas as accounting procedures, personnel and facility management, and business planning.

6. Exclusive territory: Rights are exclusive for the territory, with no other franchises sold in the same area as competition.

7. Ease of funding: Many times obtaining financing for a franchise is easier since the franchise name and reputation are usually recognized by the lenders. Therefore, banks are more likely to fund the franchisee.

8. Purchasing power: Relationships with suppliers are already established; affording the opportunity to buy in bulk, enabling a great deal of savings for the business.

9. Pre-purchase information and research: The potential franchisee can make an informed decision because of information that can be obtained prior to purchase. The Federal Trade Commission requires franchisors to provide the franchisee with certain information including the company's history, information about the officers, litigation history, audited financial statements, the franchise agreement, and a current list of franchises with owners' names and contact information.

10. Solid economic niche: Franchises cater to consumers' specialized needs. Consumers tend to prefer doing business with companies that meet their specific needs and the franchise industry has been fitting the bill.

Whether you purchase a franchise in an existing location or take on a new territory, the investment can prove to be well worth your while. If you are looking for more franchise information there are many web sites that offer free contact information for many franchises. FranchiseInformation.us offers free contact information so you can contact the franchisor directly.

Related Articles
  Why Franchises are Good Investments
  Can a Coffee Franchise Secure Your Future?
  Be Wary of the Passionate Franchise Founder
  Franchising with all its Success
  About 60% of all franchise opportunities have less than 50 units.

Article Tags:



Related Forum Posts
Re: Enticing Franchises - Top 9 List - All Franchise listed above are in millions of dollars. Do you have the list of Franchise in thousands
Re: Info for would be franchisers... - [quote="Sebastien":1d29sdv1]Like Franchise Times, Franchise Update is a very practical magazine. There is no blah blah, just straight facts that anyone in the franchise community can relate to. I just want to mention that all these magazines are NOT franchisee oriented. I mean these magazines are for franchise professionals. If you're looking to buy a franchise, you won't find much information in there. To answer your question, getting published in Franchise Times was fairly easy. I don't want to brag too much but I think I am known in the franchise industry. I was the marketing guy at Franchise.com for a few years before joining my new company, the World Franchising Network. So people know me and I have a very good relationship with Nancy Weingartner, the Managing Editor at Franchise Times. I was talking with her at the last Franchise Expo South in Miami and she mentioned she'd like me to be profiled. I was like "ok, sure!". I like this franchise executive profile thing in Franchise Times as it is rarely BS. People are usually really natural in there.[/quote:1d29sdv1] Thanks for the follow up Sebastien! And I can't say that I'm surprised that networking with the right people and managing your relationships with them properly are the keys to being published. I guess the old adage holds true of "it's not who you know, but who knows you" that's important.
how much for a franchise fee? - Dear Colleague There is no easy answer to this question. Things to consider: [list=] The sizeof the Franchise Clent base Expected Turnover Intellectual Property costs (recoup) Number of Franchises Number of employees Original Set up costs Franchise admin costs An example: A franchise that I was involved in setting was to a simple "lawn mowing/home repair" franchise. The Franchise included national/local advertising - preparation of client lists - general admin - central accounting etc The Franchise involved 300-500 clients - and an annual turnover of about $300,000 . The annual franchise fee was $30,000. Hope that this gives you some idea Take care Ian[/list]
Re: Franchise Surveys - Another good tool to researching a franchise is to speak with their existing franchisees. This contact information is included in most Franchise Disclosure Documents. In order to get a Franchise Disclosure Document or FDD as it is often referred to, you will have to complete a basic franchise application. The franchisor will then usually provide you with the FDD at that time. Included in that book of information is a list of the existing franchisees, the contract, the investment information etc... This information is required by Federal Law to be disclosed to your prior to making a purchase. So be sure to do your research and start with the Franchise Documents to get the initial information.
Re: 10 Reasons Who Startups Fail & Book Recommendations - Great post,but please edit the headline. I presume it is "10 Reasons Why Startups Fail & Book Recommendation


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Ready for a Fresh Image?

How Many Buckets Do You Need for Retirement?

Think Time

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.