It’s All Been Figured Out
Instead of starting your business from scratch, opening a franchise allows you to look at many existing models in other territories, and to see precisely the risks and rewards. One of the strongest advantages that a franchise offers is an established business model and training. As I have alluded to earlier in this chapter, creating a brand that consumers know, trust, and recognize is an uphill, expensive task. Therefore, starting with a well-known brand can be a major advantage when starting a business; for example, compare starting your own ice cream shop to opening a Ben & Jerry’s franchise. Most people recognize and think favorably of Ben & Jerry’s based on years of branding, retailing, and advertising, so the moment you hang your shingle you’ll have loyal customers who already know which of your flavors they love. Compare this to years of marketing and building a business for a new, more unfamiliar venture.
Your Competition Is Controlled
With franchises, another advantage is that competition within your franchise is controlled (in theory). It’s in the best interest of the franchise owners to help you succeed. For this reason, the corporate office will often limit the number of branches in each territory so that you are not competing directly with another franchisee. Their growth will be greater by having one successful franchisee in a territory than by having two struggling franchisees in the same territory. It should be mentioned that this is worth careful analysis when considering a particular franchise.
The Business Model Is Proven
Part of the challenge of starting your own business is establishing not only your brand but your method of doing business. For example, if you’re selling jewelry, you need to decide whether you’ll sell to retailers or directly to consumers; whether you’ll sell via the Web, open a store, or work through other existing sales channels; and how you’ll handle additional issues such as pricing, distribution, marketing, and fulfillment. Plus, before selling you a franchise, the franchisor will typically do market research to ensure your area has sufficient demand for its product/service. The franchisor will offer ongoing support including national/regional advertising, which can drive more customers to your business. You also get resources from the franchisor for your own local marketing campaigns.
In addition, for many businesses, technology is important. Often franchisors will provide a custom software package specially designed to support the nuances of the business. This alone could make the difference between success or failure. With franchises, you get all of this in a model that’s already been proven in other markets. That means much of the work and many of the decisions that can feel overwhelming on your own have already been researched, tested, and proven elsewhere.
Instead of starting your business from scratch, opening a franchise allows you to look at many existing models in other territories, and to see precisely the risks and rewards. One of the strongest advantages that a franchise offers is an established business model and training. As I have alluded to earlier in this chapter, creating a brand that consumers know, trust, and recognize is an uphill, expensive task. Therefore, starting with a well-known brand can be a major advantage when starting a business; for example, compare starting your own ice cream shop to opening a Ben & Jerry’s franchise. Most people recognize and think favorably of Ben & Jerry’s based on years of branding, retailing, and advertising, so the moment you hang your shingle you’ll have loyal customers who already know which of your flavors they love. Compare this to years of marketing and building a business for a new, more unfamiliar venture.
Your Competition Is Controlled
With franchises, another advantage is that competition within your franchise is controlled (in theory). It’s in the best interest of the franchise owners to help you succeed. For this reason, the corporate office will often limit the number of branches in each territory so that you are not competing directly with another franchisee. Their growth will be greater by having one successful franchisee in a territory than by having two struggling franchisees in the same territory. It should be mentioned that this is worth careful analysis when considering a particular franchise.
The Business Model Is Proven
Part of the challenge of starting your own business is establishing not only your brand but your method of doing business. For example, if you’re selling jewelry, you need to decide whether you’ll sell to retailers or directly to consumers; whether you’ll sell via the Web, open a store, or work through other existing sales channels; and how you’ll handle additional issues such as pricing, distribution, marketing, and fulfillment. Plus, before selling you a franchise, the franchisor will typically do market research to ensure your area has sufficient demand for its product/service. The franchisor will offer ongoing support including national/regional advertising, which can drive more customers to your business. You also get resources from the franchisor for your own local marketing campaigns.
In addition, for many businesses, technology is important. Often franchisors will provide a custom software package specially designed to support the nuances of the business. This alone could make the difference between success or failure. With franchises, you get all of this in a model that’s already been proven in other markets. That means much of the work and many of the decisions that can feel overwhelming on your own have already been researched, tested, and proven elsewhere.
