Buying a Franchise: Is it a Good Idea?
There are all kinds of options for people who want to start their own business. Some clearly carry more risks than others. If you’re looking for a way to start a business that carries a bit less risk, buying a franchise could be a great option. Owning a franchise offers all kinds of benefits, but at the same time it’s important to be aware of the disadvantages, too.
In order to help you make your decision we’ve put together the top pros and cons of buying a franchise.
Pros of Buying a Franchise
Full Training on Offer
Because you are buying into a franchise there is a pre-set training program so that all franchises offer the same experience. This means you won’t have to worry about how to train staff and even yourself. Now it’s important to note that not all franchises offer training, but the majority of them do. It could include attending a couple of classes, a representative may come to your franchise, or there may be an online element involved. The idea is that everyone is made clear about what their job is and how to go about it.
Built in Buying Power
If you are a franchise that will be carrying product and stock, another pro is the fact your franchise will automatically have buying power. You won’t be starting at the bottom with suppliers because your business already has a proven track record and solid brand. This can save you a lot of time and hassle. It also ensures you have the product and inventory needed for your customers.
Brand Recognition from the Start
Instead of having to start from the ground up when it comes to building brand awareness, your franchise will already be recognised by customers. For new businesses, one of the toughest parts is building loyalty and brand awareness, so it’s a pretty big advantage that this is already done for you.
Cons of Buying a Franchise
If you’re the type that is always coming up with great ideas and loves being creative, a franchise may not be the best option for you. Typically there are very strict rules and regulations about how you must run your franchise, how it looks, the promotions you offer, the products and services you sell, pricing, etc. For some people, the rules are a bit too confining for their liking.
It Can Be Expensive to Buy
In order to open your own franchise, you have to buy one. Depending on the franchise this can be extremely expensive. This means you’ll still need start-up cash, just as you would with any new business. Furthermore, there are franchise costs that you’ll have to pay, and the owners will always get a big chunk of the profits.
This is just a small sampling of the pros and cons to buying a franchise. If possible, try to speak to a couple of different franchise owners “off the record” and get their thoughts and opinions. This can give you an inside look that will help you out.