A Franchise is the right someone is granted to market the goods or services of a particular company within a certain location or area. The owner of the franchise (the franchisor) sells those rights to the franchisee and normally receives a fee for support and has a vested interest in the franchise’s success. Owning a franchise is a great way to become self-employed without the necessary hassles of having to create a business plan and venture into something unknown.
There are many evident and proven advantages to owning a store of your own or wanting to own your own business. Below are the top five advantages.
1. Brand awareness.
It typically takes many years for a business to build a brand that is well recognized and one that is able to drive sales and provide a advantage competitively over other small businesses. The awareness of a brand is what can build a business or even be the cause of its failure. Consumers buy products they know and from businesses they not only know but trust; franchises give owners both name and brand recognition that is instant.
2. Help with startup costs and more.
A lot of help is given to a franchise from the franchisor in staring up the business and continuing to run it. Many franchises are considered ‘turnkey’; that is when a franchise is bought all the supplies, equipment, training and instruction comes with it in starting the business. Often times, ongoing training is provided as well as management help and marketing. For example, a franchise greatly reaps the benefits of a parent company’s (franchisor’s) nationally known marketing campaigns.
3. Purchasing power.
Most franchise companies are given the opportunity to purchase their products and supplies in bulk which is typically sold at reduced rates. The savings from buying in bulk are given right back to the franchise and provides them with an advantage within the marketplace when it comes to buying.
4. An established business.
A franchise provides an advantage of running under an established and success business. The brand, ideas, and techniques for operating have already been used, tested and ready to be used again at other franchise locations.
5. Business relationships.
Establishing good relationships with providers, suppliers and vendors is a big challenge for new businesses. Within a franchise, the franchisor has already established many business relationships that a franchisee can take advantage of. It is most likely that supplier and distributor relationships are already in place and easily managed. Relationships that have already been created and used with marketing and advertisers are also very advantageous to a new franchise.