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The Benefits of Owning a Franchise


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 considered.


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.

Lower Risk

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.


Lower Investment

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.

Buying Power

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 locations.

Operating Support

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 your facility.

Key Considerations:

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 to follow:

  • 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. Here are some questions you need to ask yourself.

© 2010 FranchiseKnowHow, LLC

Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at franchiseknowhow@gmail.com

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