Franchising has been one of the best ways in starting up a business because of the benefits it offers to both franchisors and franchisees. In starting up a business, you may want to consider buying a franchise from an already well-established company.
What is franchising?
Franchising is a method of expanding a business where a company gives another but usually smaller company or an individual the license to utilize their established business formula and brand. In franchising, the franchisor (the company or business owner) gives the franchisee (the person(s) buying the franchise) the right to use his company’s trademark and techniques under certain conditions written in a contract.
Franchising offers a lot of benefits to those who would want to start up a business because:
a. It is safe and advertized. You can invest on a product or brand already familiar and trusted by the consumers. Of course, you will have to analyze the company or brand you’re planning to franchise before deciding to buy a franchise from them.
b. Methods are proven and tested. When starting up a business, one has to learn by studies, observations and even mistakes in order to formulate his business principles. In franchising an already set business formula, one doesn’t have to risk his investment and time on trial and errors.
c. It gives you a handed-down legacy. The people who originally started the business have sure encountered a lot of troubles in proving their brand effective and marketable. In franchising, you don’t start as a nobody so you wouldn’t have a hard time selling your products or services.
d. The business is managed by someone responsible over the brand. You wouldn’t have to fear same-brand competitors since franchisees are assigned their own territories. You will also enjoy the updates and improvements your brand may have in the future.
e. You will always be well-advertised. Although you will be paying your franchisor regularly, you can greatly benefit from the projects and advertisements they spend your money for.
f. You will always have the support of your franchising company. Your franchisor will always be concerned about the company’s name and sales. When you encounter problems in the sales in your location, the company will assist you because they will be greatly affected if one of their branches fails.
There are a lot of advantages in franchising, but like any business, there are also disadvantages that you may want to look into before buying a franchise. First, franchising contracts are very strict and specific. You can’t just quit the business whenever you want or when you feel like giving up. If you are aspiring to establish your own brand name, then franchising cannot give you the glory since you are only using another person’s ideas and already claimed success. Another thing in franchising is that you are not your own boss. You will have to consider the terms given by your franchisor and even follow some orders that may not sound good to you.
Franchising has its own drawbacks to businessmen but these will be manageable when you have the passion for business and the determination to succeed as a beginner in the business world.