Anyone hoping to start a business but is struggling to get investment for their business idea can look into franchise ownership. Unlike other startup avenues, a franchise requires no experience and can also give you a chance to prove you have what it takes to run a business. If you’re tired of your 9-to-5 job and want to try something different, keep reading.
What Is A Franchise?
A franchise is a business owned by an entrepreneur or group of entrepreneurs. Typically, it is under the umbrella of a parent company, which provides investment and funding. You will frequently see franchises with fast-food restaurants (think McDonald’s) or mini-supermarkets.
What Type Of Franchise Is Right For You?
There are many types of franchises to choose from, and selecting the right one is essential for success. Entrepreneurs choose their franchises based on the industry they want to work in, even if they don’t have any experience.
For example, if you want to get into the food industry, you can follow this link: Food Franchise Business | Franchising | Chuck & Roadhouse to give you an idea of the opportunities available. This can provide you with the expertise required for success if you want to launch a restaurant further down the line.
Support – Franchise ownership gives you the support of corporate. You already have the business model which has a proven track record, and the franchiser wants you to succeed. As a new franchise, you will get more support at the start to help you get going, including location selection, training, and the Grand Opening.
Low Risk – The backing of the parent company means you are secure for investment opportunities, which is not something a brand new business can always obtain. The proven success of the business means that banks are more willing to offer loans.
Brand Recognition – Unlike brand new businesses, franchises allow you to build off an existing customer base. People will recognize the brand immediately and stop by to see what you have to offer, meaning you don’t need to build a reputation via word of mouth or excessive (and expensive) marketing.
Limited Creativity – Because the franchise already has their ideas of how to market the brand, you won’t get as much input on the direction of the business plan. For those who want as much control as they can, this may be a dealbreaker.
Initial Investment Costs – While banks are happier to invest in franchises than new businesses, the initial investment can be a little steep. This is especially true of large corporations, but there are franchise opportunities for all budgets.
Reduced Profit Potential – The franchiser will take between four and six percent of all profits, and while this doesn’t seem like a lot, it is compared to the zero percent they would take if it were your own business.
You Are the Franchise
A franchise can be a highly lucrative endeavor that gets your foot in the door of their desired industry. By showing you can manage a franchise, you can prove that you have the acumen to run your own business if you desire. If not, then you can continue your successes at your franchise and move up the ladder as and when you choose.