Franchising: What It Is and Why It’s Better
Approximately 40% of people employed traditionally are considering starting a business in the next two years! The desire to be your own boss, forge your own path, and open a business has long been a staple of the American dream. For those considering opening a business, there are quite a few obstacles in front of them.
What they may fail to consider is that you can be in business for yourself without being in business by yourself. How? By purchasing and opening a franchise. With so many benefits to franchise ownership, it’s surprising that only 15,000 new franchise locations open each year.
Helping to raise awareness of what franchising is and why it’s better can create more small business owners and help grow the franchising industry.
What is a Franchise?
Most people are at least moderately aware of franchise businesses, with the first places they think of being their local fast food locations. But franchising is so much more than just fast food and restaurants. Let’s take a step back and define a franchise.
A franchise is a business model where an individual is granted the right to operate a business using the name, trademark, and operating systems by a previously established company, called a franchisor. The individual purchasing that right is called a franchisee. They pay an initial franchising fee and ongoing royalty fees to the franchisor for the right to own and operate that business.
What Kind of Franchises Exist?
While we all can quickly name a bunch of fast food restaurants that are franchises, many of us fail to understand just how many of our local businesses are part of franchise groups. In fact, today there are more than 3,400 franchise brands in the United States, with more than 300 individually owned businesses transitioning into the franchise structure each year.
What other kinds of franchises are there besides food and beverage?
Retail franchises - hardware, clothing, etc.
Cleaning and restoration services - Servpro, Jan-Pro, Molly Maid, etc.
Business services - The UPS Store, Real Property Management, FastSigns, etc.
Home services - Mr. Appliance, Lawn Squad, Top Rail Fence, etc.
Automotive - Midas, Ziebart, Tire Pros, etc.
Health and wellness - Hand & Stone Massage, Senior Helpers, Anytime Fitness, etc.
Education - Kumon, The Learning Experience, Primrose Schools, etc.
Lodging - Hilton, Marriott, Wyndham, etc.
Security - TeamLogic IT, Signal, Security 101, etc.
And many others
Pretty much any type of business selling a product or service has the potential to turn into a franchise.
With so many kinds of businesses within the franchise space, it’s easy to find one that fits with your interests, goals, and budget. So let’s look at the advantages of purchasing a franchise.
Why Should You Purchase A Franchise?
Many people may start investigating a franchise brand only to be discouraged by the initial franchise fee or ongoing royalties. While these numbers can be eye-opening, it’s important to remember that the cost of opening a business is expensive, whether you go it alone or purchase a franchise.
When you open a business on your own, you’ll be investing a huge amount of money in the start-up phase. Chances are you’ll actually be investing more on your own than you would with the initial franchise fee. You’ll just be doing it in smaller sums over a longer period of time, and without assistance or support.
Additionally, every decision you make will be based on your own educated guess and based on whatever knowledge you have been able to gain. Without expert advice and support, the road ahead could get bumpy and you could make mistakes.
Purchasing a franchise helps to smooth out that bumpy road. With access to proven systems, vetted concepts and vendors, and experts who have ‘been there, done that’, you are much more likely to experience success.
Stay tuned for our next post on the many benefits of owning a franchise.
