Buying a franchise is a little like buying the rights to distribute a particular product or service from an established provider. Franchising is a rapidly growing industry and its popularity is because of several distinct advantages:
1) Firstly, buying a franchise means buying into a proven business model. Because of this, it has been estimated that franchisees are up to five times more likely to create a successful business than those setting up alone. Because other franchisees will be already running similar operations, financial accounts will be available to analyse. This makes profit and loss forecasting more straightforward as you can really see what you are getting into.
2)By purchasing a franchise, you will immediately have the back-up and marketing budget available to large, established brands. It can take many years to build up a strong corporate reputation and branding awareness. Often marketing budgets are underestimated when starting a new business, but when buying a franchise a large degree of the marketing spend will already have been looked after.
3) In return for buying a franchise, ongoing support like training and advice is supplied by the franchisor. Training may cover how to manage the accounts, handling sales calls or general aspects about running the business successfully on a day-to-day basis. This is particularly helpful for those who have never run their own business before.
4) With a franchise it can be easier to secure the necessary financing. It costs an estimated £15,000 to £75,000 and more to purchase a franchise, depending on a number of factors. This purchase fee will cover things like goodwill, a licence fee, the cost of training and a share of the franchise marketing fees. All the main high-street banks have franchising departments and can lend up to 70% of the franchise purchase price because they understand franchising can be less risky than starting up alone.
5) There are a huge variety of franchises available. Card Connection franchisees distribute quality greeting cards to retail outlets for example. MacDonalds, and Specsavers are well known franchises but there are also many others in every area you can imagine including, child care, finance, travel, driving instruction and even pet grooming!
6) Many franchisors offer re-sale territories where the current franchisee is moving on and as a result, there is the chance to earn income from day one. Similarly, some franchisors will have a ‘national’ network of accounts which means new franchisees have an immediate ‘in’ with major customers.
7) Although you will gain the many benefits of running your own business, one main advantage of franchising is that you will not actually be alone. The franchise network you buy into will be designed to support you through any challenge. As a result, now almost half a million people in the UK have found that franchising is a great way to allow them to reap the rewards of running their own business with a vastly reduced risk.
This article was kindly provided by Andrew Cutler, Sales and Franchise Director of Card Connection.