The Benefits of a Franchise Business
Joel Caws - Technical Director, Select Your Franchise
Back in 2002, when I initially began working within the franchise industry I was surprised on the huge variety of franchise companies out there, from the well-recognised, fast food chain restaurants that grace pretty much every shopping centre, to a multitude of home based franchise opportunities that you could call upon to have your boiler serviced, your garden tended to, your carpets cleaned, or the stone chips in your car paintwork repaired.
I think my biggest surprise was that I had, in fact, used many of these services myself with out even being conscious of their franchise heritage. Just about any service you can think can, and probably already has, been franchised. Browsing through any of the on-line franchise directories will quickly provide you with an idea of the quantity of franchise options accessible to pretty much anybody with some capital to invest, a willingness to learn, a dedication to stick to the system and put in some hard graft.
So what are the advantages to a franchised business over traditional self-employment?
A proven business system
The heart of a franchise enterprise its is proven business formula. A franchise is often born out of a traditional business which, after proving itself profitable, prompts the business owner to look for further ways to expand their already profitable business. The essence of the franchise concept is, quite simply, the replication of a proven business formula.
Having a business model which is already proven offers the key advantage over self-employment in that the franchisor has already done the hard work of trying and tested the business model. They have then documented the processes and procedures that makes it successful in order that it can then be adopted by another, giving them the power to duplicate their success.
Customer impression and the advantage of branding
Of course you don’t have to think hard to recognise the power of some of the big fast food franchise restuarants. This strategy of constantly enforcing a brand message means you go into any franchise outlet knowing what to expect… the same service, the same quality, the same product. This can provide a significant advantage over establishing your own personal unknown branded business. There are of course many smaller, lesser known franchise brands which even though maybe not as widely publicised, the customer impression that it is a part of a much bigger network can in itself deliver security and confidence to the shopper that can provide you with that all important edge over competition.
Funding
When providing funding for any business start up, the bank will always assess the most important thing – How likely is the business to succeed, and therefore, is the banks funding secure and likely to be repaid in a timely fashion.
Many banks look favourably on franchise start ups because they have a proven track record. Even in these more difficult economic times, the story from the banks is still one of being open for lending. The recession though, has put even more emphasis on the bank scrutinising any business plans to ensure that the chance of success is as high as possible; another benefit of choosing a franchise business since the franchisor can provide evidence of success to help backup the franchise business plans you go along with to the bank.
Training and support
Part of a franchise package is training and support to help make sure your business has the best chance of success. This doesn’t relinquish you of any responsibility, it is your own business after all, but it does mean that you are as equipped as possible to run a successful business or that there’s someone to talk to for advice and help when times are tough.
These are just some of the key advantages in selecting a franchise business over going it alone. However, franchising is ultimately an investment like any other business. Starting up a franchise business requires initial care and attention to make informed choices along the way and then working hard to ensure best possible chance of success.
Tags: franchise, franchise business, franchise opportunities, joel caws
