Many people believe that if they are looking for a shortcut to business success, buying a franchise is one of the best options out there. There is, of course, significant appeal to buying into a franchise because it’s already a successful model. But the fact is that buying a franchise doesn’t mean you are less likely to encounter business failures. So if you are considering getting a franchise, here are the pros and cons that you should be aware of.
The Pros of Buying a Franchise
The Support
Whether you want to know how to become a tax preparer at home or how to be a business that sells pizzas, one of the biggest things that makes a franchise successful is the support system. You get help in numerous ways because a franchise is an easily replicated system, which means companies know how to train employees to get the business done. Additionally, there is help with regards to advertising and marketing. A team within the franchise usually helps you to promote your business by crafting effective campaigns.
Recognition
Many franchises come with a name the people have, at the very least, a faint knowledge of. Or in some cases, it’s already a well-established company that has earned a lot of trust. Because getting customers to recognize the brand is difficult, having a widely recognized name means you can skip a lot of the hard aspects associated with startups. Additionally, because you’re able to skip a number of steps ahead you are also getting rid of the difficult startup phase where you would normally create a business plan and conduct market research, as well as test for products.
Better Access to Funding and Finances
The price tag is the biggest obstacle for many. Depending on the cost of the franchise, it can result in variable figures coming out of your pocket. But owning a franchise can mean that you could get a better deal through SBA loans because you need to meet specific criteria. As the SBA sets aside a portion of loan amounts for franchises, this can make life easier for you.
The Cons of Getting a Franchise
The Startup Costs
While there is a very strict structure in place, the costs can be a higher amount than if you started your own business. Of course, this means that you are buying into an already popular brand and this is merely the ticket price. And why you can get financing, it’s not always guaranteed.
Sticking to the Franchise’s Rules
When you own a franchise, there will be a certain level of autonomy but you will mainly have to follow the rules of how the business conducts its operations. And even if you found a better way to run the company, if the powers that be don’t agree with you, you’ve still got to stick to their rules.
How it’s Marketed
Since you’re going to have to stick to the rules that the franchise provides, this may mean that you can’t market the business how you may want to market it. Franchises will usually have a specific marketing agency that they’ll want to work with, sometimes, the franchisees can’t market at all but instead just have to agree to whatever promotional material they’re given. If you’re wanting to have creative liberty, especially when it comes to marketing then you may not get so lucky.
Having to Deal With the Reputation of the Company in Bad Times
Even if your franchise location is incredibly efficient, if the umbrella company is running into any issues, this can have a knock-on effect on your business. No matter how you figure out ways to learn how to boost your bottom line, it can be in vain.
For all the pros and cons of starting a new business, a franchise can make life easier for you but it’s a decision you will have to come to after a lot of careful consideration.
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