Why Join a Franchise

Many people consider starting a small business. Why do so many people choose to join a Franchise network rather than going it alone?

There are several good reasons for joining a Franchise and they apply at various stages in the life of a business. Consider the differences between an independent business and a Franchise when you look at the following:

The Inertia Factor

For many, the dream of owning their own business continues to remain just a dream. A lot of consideration is given to commencing but inertia sets in and taking the step of actually getting underway doesn’t happen. After all, when you begin, there are so many decisions to be made without really knowing the answers.

For example, what is the best equipment to use, what price should you charge, how will people get to know about you when there may be many other independents doing the same thing, and what about legislation or health and safety or insurance?

A Franchise has all of this mapped out in a systematic way and will prompt you to take the next steps to ensure that the business is birthed.

Development tools

Even if these decisions are made, there are then a raft of new items to deal with before starting work. What will you call the business and how will you develop a brand image? What will that cost to do? What business tools do you need to develop to be successful and how long will it take to produce these? How will the finance and administration work?

Again, a Franchise organization will have worked all this out and most of these items should be in the manuals or available for purchase off the shelf. They are also likely to know suppliers with the right items which are available immediately.

Failing to get the best out of the business

Having made a start, it is useful to know how you are doing. But who does an independent compare their staff pay, their print prices, their purchase costs or their profit margins with? It could be that you are a couple of percentage points lower with each of these. This may represent the entire Franchise Fees being paid by your Franchise competitor to its Franchise Headquarters. In particular, as a Franchise grows there are economies to be had when purchases are made.

Who do you turn to when the unexpected happens? Do you know someone who can help out if a staff member goes sick? What are the consequences if you get the answers wrong? A Franchise does not offer a panacea in every circumstance, but there is usually another head to discuss a problem with. It may be that someone at Headquarters can offer an answer or another local Franchisee may be able to help out.

Planning

Unless you are a very disciplined person, planning for the future or even for the next marketing campaign may be put off time and time again. A responsible Franchisor will want to spend time with you, running the business cashflow model and helping you to decide the business plans that need to be put in place. After the meeting, they should be in regular contact to see if the plans are being activated successfully. After all, they only make money if you do.

Developments

No business can afford to stand still. It will either advance or retreat in the face of all the demands being made on it. But developments take time and money, which a small independent business often does not have. An independent business that commits 2% of their turnover to marketing ideas is a poor relation to a Franchise where every business commits 2% to the same to a central ‘pot’.

Consider the power of the Franchise in this area. Individual Franchisees may see an idea that is worth investigating. Headquarters then devotes time and money to the idea and commences a pilot in a few areas. Some ideas may not work. Others are polished and rolled out to every Franchisee. With a growing group of Franchisees, this may mean many finished ideas every year.

Selling up

Finally, for a variety of reasons, every business owner always sells up sooner or later. An independent business may be highly dependent on the business owner, which lowers the value of the business when it is sold. A successful Franchise will constantly be looking for new recruits to take over when established Franchisees want to move on. With all of the benefits mentioned above, this is a much better proposition for a new purchaser.

And finally, statistics show that the majority of independents fail within five years. 95% of franchised outlets will still be up and running.