As covered before, a franchise provides an opportunity to buy into an existing, successful business model that has a proven track record, a successful training program, a solid supply chain, and expert technical support. Some of the best-known franchises have impressive success rates with low chances of failure. If you are considering buying into a franchise, here are some advantages to help you decide if the venture is right for you. Contact Franchise Unlimited to get started.
Capital
The most common barrier to expansion faced by today’s small businesses is lack of access to capital. Franchising is an alternative form of capital acquisition that allows entrepreneurs to expand without the risk of debt or the cost of equity. Since the franchise provides all of the capital required to open and operate a unit, it allows companies to grow using the resources of others. Plus, since the franchisee, not the franchisor, signs the lease and commits to various contracts, franchising allows for expansion with virtually no contingent liability.
Business Assistance
Franchise owners receive valuable assistance throughout the life of their business. Many franchises are, in fact, turnkey businesses. This is a phrase that refers to a business that requires little-to-no effort to open. A business model is already in place and the products and services have been defined, so the startup phase is complete. But, back to the point: When you buy a franchise, you receive all of the equipment, supplies, and instruction needed to start your business. In many cases, you receive ongoing training and help with management and marking.
Loyal Customers Base and Brand Recognition
One of the hardest parts of starting any new business is finding your first customers, which is one of the reasons why so many people turn to franchising. When you buy a franchise, you get to bypass a lot of the work that goes into marking and branding a new, unknown business. Investing in a franchise grants you access to an established, loyal customer base and potential employee pool. Plus, buying an established and recognized brand can give you an accelerated path to profitability by bringing in customers and prospective employees from day one.
Improved Value
The combination of faster growth, increased profitability, and increased organizational leverage helps account for the fact that franchisors are often valued at a higher multiple than other businesses. When it comes time to sell your business, should you decide to, the fact that you're a successful franchisor that has established a scalable growth model is certainly an advantage.
At the end of the day, buying a franchise is like buying any business. You have to do your due diligence and investigate the franchise fully before making any big decisions. If you feel like you are well-suited for a franchise operation and select the right franchise, being a franchisee can indeed be the fast track to success. To learn more about franchising, or to see how Franchise Unlimited can help, give us a call today.
