Horrible bosses are one of the many reasons that make you want to open your own business. So you got up from the right side of the bed one morning and you decided to work for yourself? There are three possibilities to mull over. Should you start a business from scratch, or buy a business that someone is ready to sell or should you buy a franchise? Starting a business requires capital and excessive marketing. Buying an existing business entails cleaning up the mess of the previous management. But buying a franchise means you have rights to an already established brand. Here are a few reasons why people usually opt for franchise when they want to run a business.
1. Minimal Risk
If you are buying a McDonald’s franchise, the business idea is already tried and tested and successful. There is little probability for it to fail unless you are launching it in a remote area. However, if you were starting out on your own, there was as much a chance for success as there was for failure and your investment would’ve been at high risk. In case of a franchise, the venture is already established and will pick up profits faster.
2. Brand awareness
You do not need to spend a considerable amount of time telling people about your business idea or sweat about elevator pitches or read blogs on how to lure investors. When you buy a franchise, you are served cake on a platter with a cherry on top. The heavy-lifting has already been done. People know what your business is about. This instant recognition from customers is an added bonus.
3. Ongoing Support
Another fantastic thing about buying a franchise, apart from working for yourself, is that you get support from the franchisor that you don’t normally get in independent businesses. Franchisors provide support and training to keep the franchisees in shape. They also send field support specialists to keep things in check and offer training to mold their franchisees into better businessmen, managers and leaders.
If you have started “Coffee Café”, then you have to burn all the cash for marketing and advertisement out of your own pocket. But if you have bought a Starbucks franchise, then you have this coffee giant’s bank account funding your adverts. You do have to periodically contribute some amount to the advertising fund though but that doesn’t cost as much as nationwide or region-wise marketing campaigns that can burn a hole in the pocket.
5. Faster returns on Investment
It takes time to build clientele when your business is new. But if you are a franchisee, you have ready-made customers since your brand has been around and the clients already trust the brand name. So profits start rolling in faster and soon, you cross the breakeven point.
Even exit strategies tip the scales in your favor when it comes to franchises. With your own business, you never know if you could sell it without bargain and potential buyers are low if any. In case of franchises, the resale value is great and potential buyers are high as well. And even if no one is ready to buy, the franchisor is the last resort, who buys it back.