6 Fantastic Facts About Buying Franchises
Do you hate your job? Do you feel like you should be doing more but you don't know where to turn? Does the idea of being your own boss excite you but scare you at the same time?If you answered yes to any or all of those questions - you should look into opening a franchise. Franchises are already (and proven) successful businesses that are looking for people like you to help them open new locations.Want to learn more about buying a franchise, like how to do it and who's a good fit? Read below.
1. It's Easier than Starting a Brand New Business
No one really knows how hard starting a business is until you're in the trenches of it. There are no hard rule books, just hundreds of online articles by people who may or may not know what they're talking about.Not only do you have to come up with your own idea structure when you start a from-scratch business, but you have to figure out a name, a list of bylaws, and file all the paperwork as well.When starting a business from scratch, it's advisable to have a lawyer to look over your papers, which adds to the costs. Registering an LLC alone in your state costs a few hundred bucks. (The prices differ by state.)While starting a franchise isn't easy, it's still hard work, there are more maps and guidelines laid out for you. You get contacts at corporate who can walk you through when you get stuck and truly wants you to succeed.Plus - you have a business model and strategy in place. Writing a business plan can take months - and all you need to do is edit yours (in legal ways) to fit your personal location.
2. They Provide Training
Many franchise businesses have a back end, where you can watch and participate in training videos. They can cover anything from what first steps to take after you've cleared your costs, to how to introduce a new product line.If it's a clothes-based business, some companies even hold training on how to style outfits for yourself/the mannequins.If there's something you want that you don't see in the backend training video library - go ahead and ask for it! There should be customer support there to help and listen to you.Many franchises also have a private group Facebook page or team calls. If your question is still burning, you can ask it there, where people can give you advice they've actually lived through, not something that sounds good on paper.And hey - even though you're going at this alone in your area, you'll make some other franchise owner friends/future partners along the way.
3. You Can Sell it if It Doesn't Work Out
We're confident that you can make this business opportunity work - no matter the one you end up choosing. But if something happens suddenly or you actually give it your best try and it doesn't work out, you can sell the franchise.Now, it may take some time to sell and there will be hoops to jump through, but you can get out. We've seen people hire private brokers when they sell their franchise and times when corporate helped the current owner by sending leads their way.
4. It Has a Higher Chance of Success
For a while, there was a statistic floating around that 80% of businesses fail. The number changes depending on what source you look at, but less than half of from-scratch businesses are still open five years after they start.Franchises aren't (usually) part of those statistics. Since there's already a customer base from other locations, you don't have to fight for recognition. It also costs less, like we already stated, in the long run, to actually run the store.You can thank the franchise owners before you, for shaping the company and setting you up for success.We don't have the actual statistics, but you're much more likely to succeed long term with a franchise than you would start out on your own.
5. Branding is Figured Out For You
When you start your own business, you have to come up with a name, a logo, a slogan, a website design, a brand voice, all your social pages and a strategy to run them. Other than the fact that you'll have to fill out some website and social information - a franchise does all that for you.Let's say you wanted to open a Kentucky Fried Chicken. You already know the colors and the logo off the top of your head. Right?You may even see the Colonel's TV depiction in your head right now.You'll have to come up with your own marketing content some of the time, but you can always share/copy what other locations are doing. That includes online promotions/content and whatever marketing materials you have in-store.
6. Banks Like Established Businesses
If you walked into a bank today with an idea and a business plan for a from-scratch business, you might get approved. But if you walked in with a business plan from a successful and well-known franchise business, you'll have an easier time convincing them to lend you money.Of course, that still depends on things like how well you've prepared for the loan meeting, your credit, and your lending profile, but like we said - franchises are more successful.Banks want to make their money back. They don't make money as an institution if you go bankrupt trying to make a brand new business work.
Buying a Franchise - Is it For You?
Even though buying a franchise is a little easier and marginally cheaper than starting your own business - it's not the right choice for everyone. You'll own your business, but you'll still have to follow corporate's rules and regulations.If you're someone who wants 100% control - franchises aren't for you.But if you can handle working and growing your business as a team, then you should find the right niche. You're already on the path to success.Ready to learn more? Read our "getting started" guide here.
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