If you are thinking to start your business, one thing that you must consider is that you need to ask question whether you want to start an independent franchise or business. There lie many advantages of franchising and also disadvantages.
While considering yourself being with a franchise, you need to weigh all the advantages of franchising, but there are all potential risks which you must consider. In this article you will witness all the pros and cons so that you can define whether franchising is the right move.
Advantages of franchising for the franchisee
Franchisee generally involves third-party buyer who buys the rights of the brand from the franchisor. Initially the franchise pays a primary fee to the franchisor for the rights for the usage of their brand in addition to ongoing franchise fees for royalty, marketing and more.
There are many advantages of franchising for the franchisee including:
Brand Recognition:
While opening a franchise a big advantage that franchisees must have good brand recognition. If you are starting a business from very beginning, you must build your customer base and brand from the ground level, and that would take time.
Franchises on the other hand are already well established and people already aware about them. So, while opening a franchise with the already established brand, people tend to know your business automatically.
Assistance in your business:
One of the advantages of franchising for the franchisee is the assistance they get from the franchisor.
As per the franchise agreement and the type of business, the franchise receives a turnkey business operation. They may be provided with the equipment, the brand, supplies and the advertising plan- generally everything that they need to run the business.
Basically some other franchises have an access to a deep and bold reservoir of business assistance to help them through the process of operating and owning a business. This knowledge can be crucial for running a profitable business.
Lower rate of failure:
Basically, franchises have less risk rate than single business. When a franchisee buys into a franchise, they are joining hands with profitable brand, as well as connect with the network which offers them advice, support.
Power of buying:
Another advantage of franchising is that the networking size. If you are running a solo business and need to order supplies or products, you are paying double money every item because your order is proportionately small.
However, while buying a bulk products can give you higher discounts. The master company can use the size of the networks to arrange for deals that every franchise benefit from. Low cost of good lowers the whole operation costs of the franchise.
How you get profit?
Basically, franchises get higher profits than independent established businesses. Most franchises have reputed brands that bring customers. The more profitable the brand, the more profits you gain. The franchises that require a high starting investment for the franchise fee sees big return on investment.
With all the above points, now you will have no more worries while investing.