The Benefits of Owning a Franchise
by Ed Teixeira
Itís estimated that there are more than 2,500 franchise opportunities
available in North America. Owning a franchise is an opportunity to be part of a
proven business concept. However, choosing the right franchise requires
knowledge, objectivity and a good dose of reality. Even though the benefits of
owning a franchise compared to building a business from the ground up are
numerous, each franchise opportunity must be evaluated on an individual
basis. The needs and capabilities of each prospective franchise must be
An Established Track Record
As a franchisee, you can become part of a proven
business system. The business system includes marketing and day-to-day
operations. The franchisor can offer a concept with products and services that
have sold successfully. This history of success can enable franchisees to learn
from and to help predict their own future. Be sure that the franchise you select
has a successful track record. In the case of a new franchise the more company
owned locations in operation the better.
Quicker Start Up
There is a shorter learning curve for a franchisee owner,
because there is assistance from the Franchisor. The Franchisor has experience
to draw upon in starting new operations and operating locations. Itís also
important that the Franchisor provides good training and start-up support.
The risk of failing are lower with a franchise operation, because
of the experience, expertise and proven resources that a franchise provides.
Since a franchisor has already operated the franchised business there is an
existing body of knowledge. The longer the business has been in operation the
more experience the franchisor has accumulated.
Since most franchises keep their initial investment low,
this fact favors entrepreneurs. Franchisees are looked upon more favorably by
lending institutions, which often look positively on lending to franchisees
because of their high success rates.
The buying power of franchisees can contribute in lowering the
costs of doing business. Franchise buying groups have the ability to negotiate
lower prices for supplies and services. As an independent business owner there
is little leverage in demanding lower prices from suppliers.
Stronger Brand Recognition
With an established franchise, you have the
benefit of marketing an established brand of products or services. In the case
of a new business it can be very costly to build brand recognition but in the
case of a new franchise operation there is brand recognition from company owned
As a franchisee, you can receive business support, in the
areas of site selection, training, operations, marketing and new products and
services. The Franchisor will assist you in developing a business plan, in
learning the best ways to hire and manage personnel, and how to properly manage
Acquiring a franchise is an opportunity to own and operate a business with an
existing operating system and track record. When considering buying a franchise
itís important to validate the franchise opportunity. Here are some simple tips
- The franchisor should have
strong experience in the specific industry
- The franchisor should have
a successful track record with franchised or company owned operations
- The potential for
franchisee earnings should relate to the initial investment in the franchise
- The franchisee royalty
should be reasonable
- Be comfortable with the
Franchisor and the support that youíll receive
If you want to own and operate a business then a franchise can be the best
choice you make. Be sure to perform the proper due diligence.
are some questions you need to ask yourself.
© 2010 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at