Pros And Cons Of Franchising – What You Should Know
Are you looking to start something new? Recently retired but looking to get back into a business? Are you a business owner who is looking to expand your empire? Or maybe you just want to try something new and you have the capital to do it!
Whatever your reason, if you’re ready to start a business but not sure if you should start one from the ground up or look into purchasing a franchise, we’ve laid out all the pros and cons of franchising that can help you make the right decision for your business.
Here at MVision Franchise, we focus on selecting the best franchise model for your needs, passions, interests, and budget. However, we aren’t just in the business to make franchisees successful, we want to be a resource for those who are interested in branching out and trying something new! That’s why we write articles like this one and “Should I Buy A Franchise Resale, Or Start A New Franchise?” to help you understand the ins and outs of the franchise industry!
If you’re interested in learning more about the pros and cons of franchising, keep reading!
Fast Facts About Franchising
Before we get to the pros and cons of franchising, let’s take a look at the franchising industry!
- There are over 750,000 franchise establishments across the United States.
- Franchises employ over 2 million people in the U.S.
- During a single business day (8 hours), a new franchise opens every 8 minutes! That’s roughly 60 new businesses a day!
- More than 300 industries comprise the United States franchise sector.
- The failure rate for a franchise is low compared to those who open a ground-up, start-up business.
Pros Of Franchising
When deciding to become a franchisee you are making a deal with the franchise owner (franchisor) to license and run the business according to their guidelines.
Established Business
This is one of the most significant pros of franchising. You don’t have to worry about starting a business from the ground up because you’re joining an already established business.
They’ve gone through the trial and error of starting a business, understand the marketing, and have trusted vendors who provide the supplies needed to run the business.
They also have a team who works specifically with franchisees to ensure they succeed!
Brand Recognition
What’s the number one thing you need to succeed as a business? CUSTOMERS.
If you start a business that has no customer base, it will take a while to start building and bringing in the profits that you’re looking for.
When you start with a business that is well known and has good brand recognition, you already have a built-in customer base and a jump start towards making your business a success.
You will also have the right marketing strategy, promotions, and more, already tested and proven to work with your target market!
Low Risk
Failure is hard when you have all the tools in your tool belt! You won’t have to worry or question business choices because it’s already there for you!
As a franchisee, you’ll get to be your own boss, and run your own business, but have the stability of a well-oiled machine supporting you in every way possible! Your franchisor WANTS you to succeed because it only makes the entire business stronger and more successful.
The chance of franchise failure is lower than for those who start from scratch.
Cons Of Franchising
In terms of the negatives of franchising, there are only ones that you set up for yourself.
Following Rules
If you don’t like to follow the rules and want to do your own thing, a franchise might not be for you. You have guidelines and rules to follow that are there for a reason.
If you feel like you don’t need to abide by these, then you aren’t really following the contract you signed when you decided to become a franchisee.
The whole point of being a franchisee is to have the support of a team behind you that has seen success and has been able to package it up for others!
Cost To Start
Another thing that people consider a con of franchising is the initial costs to start the business.
Becoming a franchisee can cost you anywhere between $10,000 to $1,000,000 depending on your choice of business.
However, these costs cover EVERYTHING you need to get started and run your business.
If you started from scratch you’d have to put in as much if not more money to get your business up and running properly. You can also make mistakes during the beginning phases of your business that can be costly and no one likes to waste money. At least with a franchise business, you know the money you put into your business is all necessary and going to something worthwhile!
Want To Know More About The Pros And Cons Of Franchising? See MVision Franchising Today!
If you’re ready to discuss the pros and cons of franchising, schedule a call with us today!
Owner and founder of MVision Franchise, Dr. Marc Camras, has worked with entrepreneurs all over the nation to match them with the right franchise and help them succeed.
We have the largest network of franchise businesses and start-up concepts, which gives you a better chance of finding your perfect business match!
To learn more about Marc Camras and MVision Franchise, continue reading our articles and browsing our website for helpful resources and information!