Is Owning a Franchise the Easiest Way of Starting a Business?
Is Owning a Franchise the Easiest Way of Starting a Business? The answer is an honest YES.
These days, if you are planning to start a business, it is way easier than before. There are alot of businesses nowadays who are open for partnerships. They are looking for serious entrepreneurs who want to be a part of their proven business system.
This way of owning a business is called franchising.
So what specifically is franchising?
Franchising is a form of business by which the owner (franchisor) of a product, service or method obtains distribution through affiliated dealers (franchisees). It is a continuing relationship in which a franchisor provides a licensed privilege to the franchisee to do business and offers assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration.
So who can start a franchise business?
Anyone. Anyone who has the capacity to.
Franchises offer a systematic approach to setting up a shop. Business opportunities provide a business kit with clear guidelines for selling a basic product or service. Here's a closer look on how franchising works:
1. Buying the Business.
With franchising, you are buying an existing business. It is way easier than starting a business from scratch. First, you already have the needed business plan. Moreover, you are buying an already proven, known business, therefore, marketing it would not be a struggle.
So what is the first step in franchising?
You start by buying a business. Of course, this happens after all the researches, thorough thinking, or after you have attended the “D Day”. (Discovery Day wherein the franchisee and the franchisor meets and from there on, they would know if they are a perfect fit.)
2. A Well Known Brand.
When you buy a franchise, you are actually buying an already known brand. This means, greater advantages for you - the franchisee. One, you get a proven system. Two, you will be equipped with the tools, knowledge, equipment, documents… literally everything that you need in order to start your own franchise business. With a franchise business, you are not in the business alone. Three, an experience is not required nor necessary. You will be fully trained prior to the start of your business. Same thing with your employees if any. They will be trained and equipped with the knowledge they need in order to help you run the business. Lastly, with franchising, you have the advantage of committing less mistakes, therefore, decreasing the risks and the possibility of business failure. It is not easy to start a business from scratch. Hence, compared to buying a franchise, a startup business does not have an already perfected daily operations yet. Thus, profit does not start from day one. It might take a few months up to a year in order for the startup business to gain the needed profits. It is indeed a trial and error thing.
3. A Clearer Picture of the Competition.
Reputable franchisors conduct market research before selling a new outlet, so you have a greater confidence that there is a demand for the product or service. The franchisor also provides you a clear picture of the competition and how to differentiate yourself from them. With franchising, you need not to religiously study the market, research on the competitors, think of new marketing strategies and plan… the franchisor will provide all of these crucial information to you.
4. Filing of Documents is a Breeze.
When you buy a franchise, you are purchasing the rights of a proven business. In such case, since the business is already existing, there are fewer documents needed. Moreover, there will be no hassle on your part. The franchisor will assist you with the documentation and the legalities.
5. The Economics.
Lastly, franchisees enjoy the benefit of strength in numbers. You'll gain from economics of scale in buying materials, supplies and services, such as advertising, as well as in negotiating for locations and lease terms. By comparison, independent operators have to negotiate on their own, usually getting less favorable terms. Some suppliers won't deal with new businesses or will reject your business because your account isn't big enough, but if you own a franchise, this is definitely not an issue. Materials, supplies, uniform, equipment - will all be provided to you by the franchisor.
So how do you choose the right franchise business to buy?
With so many franchise systems to choose from, thinking about it can give headaches. However, you may start by investigating various industries that interest you to find those with growth potential. Narrow the choices to a few industries you're most interested in, then analyze your geographic area to see if there's a market for that type of business. If so, contact all the franchise companies in those fields and ask them for information on their franchise opportunity. Any reputable company will be happy to send you information at no cost.
Of course, you surely need not to rely solely on the information that will be given to you. You need to do your part by checking thoroughly. Start by visiting your library or try looking up on the newspaper articles, searchable information via web - Is the company you are interested with worth buying? Is the company well managed and in fact, growing? Is the business currently in debt? These things and more would definitely help you on your decision.
Once you've decided on a certain franchise through your research, you need to find out if this opportunity is as good as it sounds. Your next step is to analyze it thoroughly to determine whether it's really worth buying.
Below are some of the key aspects to research on:
If the franchisor--as well as the current franchisees--are profitable
How well-organized the franchise is
If it has national adaptability
Whether it has good public acceptance
What its’ unique selling proposition is
How good the financial controls of the business are
If the franchise is credible
What kind of exposure the franchise has received and the public's reaction to it
If the cash requirements are reasonable
What the integrity and commitment of the franchisor are
If the franchisor has a monitoring system
Which goods are proprietary and must be purchased from the franchisor
What the success ratio is in the industry
So, are you ready to start your own business thru franchising? Good luck! May you find the best business that perfectly suits you, your passion and your needs.
Is Owning a Franchise the Easiest Way of Starting a Business? The answer is an honest YES.
These days, if you are planning to start a business, it is way easier than before. There are alot of businesses nowadays who are open for partnerships. They are looking for serious entrepreneurs who want to be a part of their proven business system.
This way of owning a business is called franchising.
So what specifically is franchising?
Franchising is a form of business by which the owner (franchisor) of a product, service or method obtains distribution through affiliated dealers (franchisees). It is a continuing relationship in which a franchisor provides a licensed privilege to the franchisee to do business and offers assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration.
So who can start a franchise business?
Anyone. Anyone who has the capacity to.
Franchises offer a systematic approach to setting up a shop. Business opportunities provide a business kit with clear guidelines for selling a basic product or service. Here's a closer look on how franchising works:
1. Buying the Business.
With franchising, you are buying an existing business. It is way easier than starting a business from scratch. First, you already have the needed business plan. Moreover, you are buying an already proven, known business, therefore, marketing it would not be a struggle.
So what is the first step in franchising?
You start by buying a business. Of course, this happens after all the researches, thorough thinking, or after you have attended the “D Day”. (Discovery Day wherein the franchisee and the franchisor meets and from there on, they would know if they are a perfect fit.)
2. A Well Known Brand.
When you buy a franchise, you are actually buying an already known brand. This means, greater advantages for you - the franchisee. One, you get a proven system. Two, you will be equipped with the tools, knowledge, equipment, documents… literally everything that you need in order to start your own franchise business. With a franchise business, you are not in the business alone. Three, an experience is not required nor necessary. You will be fully trained prior to the start of your business. Same thing with your employees if any. They will be trained and equipped with the knowledge they need in order to help you run the business. Lastly, with franchising, you have the advantage of committing less mistakes, therefore, decreasing the risks and the possibility of business failure. It is not easy to start a business from scratch. Hence, compared to buying a franchise, a startup business does not have an already perfected daily operations yet. Thus, profit does not start from day one. It might take a few months up to a year in order for the startup business to gain the needed profits. It is indeed a trial and error thing.
3. A Clearer Picture of the Competition.
Reputable franchisors conduct market research before selling a new outlet, so you have a greater confidence that there is a demand for the product or service. The franchisor also provides you a clear picture of the competition and how to differentiate yourself from them. With franchising, you need not to religiously study the market, research on the competitors, think of new marketing strategies and plan… the franchisor will provide all of these crucial information to you.
4. Filing of Documents is a Breeze.
When you buy a franchise, you are purchasing the rights of a proven business. In such case, since the business is already existing, there are fewer documents needed. Moreover, there will be no hassle on your part. The franchisor will assist you with the documentation and the legalities.
5. The Economics.
Lastly, franchisees enjoy the benefit of strength in numbers. You'll gain from economics of scale in buying materials, supplies and services, such as advertising, as well as in negotiating for locations and lease terms. By comparison, independent operators have to negotiate on their own, usually getting less favorable terms. Some suppliers won't deal with new businesses or will reject your business because your account isn't big enough, but if you own a franchise, this is definitely not an issue. Materials, supplies, uniform, equipment - will all be provided to you by the franchisor.
So how do you choose the right franchise business to buy?
With so many franchise systems to choose from, thinking about it can give headaches. However, you may start by investigating various industries that interest you to find those with growth potential. Narrow the choices to a few industries you're most interested in, then analyze your geographic area to see if there's a market for that type of business. If so, contact all the franchise companies in those fields and ask them for information on their franchise opportunity. Any reputable company will be happy to send you information at no cost.
Of course, you surely need not to rely solely on the information that will be given to you. You need to do your part by checking thoroughly. Start by visiting your library or try looking up on the newspaper articles, searchable information via web - Is the company you are interested with worth buying? Is the company well managed and in fact, growing? Is the business currently in debt? These things and more would definitely help you on your decision.
Once you've decided on a certain franchise through your research, you need to find out if this opportunity is as good as it sounds. Your next step is to analyze it thoroughly to determine whether it's really worth buying.
Below are some of the key aspects to research on:
If the franchisor--as well as the current franchisees--are profitable
How well-organized the franchise is
If it has national adaptability
Whether it has good public acceptance
What its’ unique selling proposition is
How good the financial controls of the business are
If the franchise is credible
What kind of exposure the franchise has received and the public's reaction to it
If the cash requirements are reasonable
What the integrity and commitment of the franchisor are
If the franchisor has a monitoring system
Which goods are proprietary and must be purchased from the franchisor
What the success ratio is in the industry
So, are you ready to start your own business thru franchising? Good luck! May you find the best business that perfectly suits you, your passion and your needs.