Is Starting a Franchise Right For You?
When becoming an entrepreneur, you have a few different options. One option is to start your own business. Another option is to take over an existing franchise.However, for many individuals, the best option is to start a franchise themselves. Are you interested in starting a franchise? Wondering if it's the right decision for you?Then read on. Below, we're not only going to get into the pros and cons of opening a franchise, but we're also going to compare it against other entrepreneurial endeavors. Let's get started!
Starting a Franchise vs Other Options
To understand whether opening a franchise is the right decision for you, you must first write off other entrepreneurial options. We're going to help you do this by discussing the characteristics of each.
Starting a Franchise
Starting a new franchise allows you a good balance of freedom and security. Not only do you get the responsibility of leading the startup of the franchise, but you're also given ample support by the franchisor. The general downside to starting a franchise is that it's expensive.
Buying an Existing Franchise
Buying an existing franchise is often the best move for new entrepreneurs. A franchise which is already established already has an infrastructure in place, meaning that there is very little startup work involved. The downside to buying an existing franchise is that you take on existing problems.
Starting a Business from Scratch
Starting a business from scratch can be a fulfilling experience. Not to mention, it affords you complete control over your entrepreneurial endeavor. However, as far as training, location selection, and startup costs go, starting your own business leaves you without support.
The Upsides of Opening a Franchise
The upsides of opening a franchise are many. The most prominent of these upsides are as follows.
When you open a franchise, you're not going at it alone. Instead, you have the full support of the franchisor on your side.Not only will your franchisor help direct the startup and operation of your franchise, but your franchisor might also provide monetary assistance. If you're an inexperienced entrepreneur, in particular, this manner of support can be hugely beneficial to the success of your business.
Brand Name Leverage
Starting a business from scratch requires a great deal of marketing. You have to get your business's name out there before anyone will recognize or trust your brand. Doing this is not only time-consuming but expensive.When opening a franchise, however, you are able to leverage the brand of the business you're franchising. Because this brand has thrived for years, it has already established credibility amongst consumers.
Another major upside of opening a franchise is that you'll be supplied with experience-backed training. Instead of having to test and establish operational processes yourself, you'll be taught already-successful processes.Most franchisors go out of their way to train their franchisees. They have a great deal of money resting on the success of their franchises and want to make sure that they're equipped to succeed.
Tried and True Business Model
Independent businesses fail every day. Independent business owners are forced to bite the proverbial bullet and cut their losses, putting themselves in dire financial straits in the process.While franchises are not guaranteed to succeed, they stand a much greater chance at succeeding than do independent businesses. Why? Because they make use of business models which are tried and true.If a specific business succeeds in 350 different locations, it's likely to succeed in a 351st location as well. In other words, because franchises come with tried and true business models, they are at very low risk for failing.
Help with Advertising and Inventory
Though it's not true of them all, many franchisors will help their franchisees with advertising and inventory. In contrast, if you start a business from scratch, you will be solely responsible for all advertisement and inventory costs.
The Challenges of Opening a Franchise
While opening a franchise can be highly beneficial, it's not without its challenges. The primary challenges of opening a franchise will be discussed below.
Working Through Regulation
One of the primary challenges of opening a franchise is working through regulation. When you agree to start a franchise, you agree to abide by the franchisor's rules and processes. In other words, you have limited freedom as to how you can run the franchise.If your sole purpose of starting a business is to make money, this shouldn't be a detractor. However, if you're looking to do something different with your business than what has already been established, opening a franchise will restrict you.
Co-existing with the Franchisor
Another challenging aspect of opening a franchise is co-existing with the franchisor. When starting a franchise, you will be subordinate to the company at large and will have to regularly cooperate with various supervisors.Some individuals are fine with this arrangement. In fact, some even like it. Note, however, that other individuals -- particularly those who aim to be their own boss -- can grow to resent it.
Running the Business
As we've highlighted above, opening a franchise is easier than starting a business from scratch. However, this isn't to say that its a walk in the park. In order for your franchise location to be successful, you must still put in a great deal of time and effort.Running a business is always a challenge, regardless of the resources one has available. Be sure that you know what you're doing before signing any contracts.
Obtaining Startup Funds
There is no more expensive way to break into the entrepreneurial world than by starting a franchise. In other words, starting a franchise includes costly startup funds.Note, however, that franchises' high startup costs exist for a reason, the reason being that franchises have a high success rate. So, while you might have to invest a good deal of money initially, you'll reap rewards in the long-run.
Thinking About Starting a Franchise?
What do you think? Would you like to own a franchise? Is starting a franchise the right option for you?If so, you might consider starting a commercial cleaning franchise with OpenWorks. In business since 1983, we work with franchisees all throughout the United States.Contact us today to discuss the prospect of franchising!
Ready to be your own boss?
Learn more about becoming a business owner with OpenWorks.Apply Now