Owning a business takes resilience, mental stamina and a good support network to keep you going and growing. Franchise ownership is a path to achieving the freedom of being in charge of your time and financial position for the right person. Is that you? Here are some pros and cons
of franchise ownership to consider.
The Pros
There are three overwhelming pros to franchise ownership: expediency, support and the value in the business model.
Faster path to business ownership
When you start a business, there is a critical research phase. In addition to a detailed vision of your business, you need to know the market will support your endeavor and you need a strategy to grow the business. You must establish your brand, secure vendors, create a communications plan to attract customers and determine staffing. If you need financing, your business plan needs to be risk-proof.
With a franchise, the company has done this work for you, which significantly advances your timeline to business ownership. Your risk is reduced with a proven system that includes vendor relationships, hiring and marketing. Financing can also be more easily obtained and sometimes directly from the franchisor.
You're in a partnership, not on your own
As a franchisee, you are entering into a partnership
with the company and you benefit from their expertise and knowledge to make your business successful. The franchisor also keeps current with industry trends, opportunities to improve technology and ways to increase sales. They can also negotiate more easily with vendors due to their larger buying power. You get the benefit of a dedicated partnership while still running your own business.
Aggravating tasks are covered
There are many tasks of running a business that owners find time-consuming: human resources, marketing and staying current on trends. Franchisors have a structure in place for these important tasks which significantly limit the time the franchisee has to spend on them. Franchise ownership is very efficient when it comes to many of the operational tasks and it allows you to focus on growing your business.
The Cons
There are three elements of franchise ownership that could be cons, depending on your motivation for starting a business.
Structure versus creativity
Franchise ownership comes with a business structure. If you are a creative type, you will have to decide if you can give up some creative decision-making for the larger franchise benefit. For example, you cannot add a new product or service line or choose new vendors that are not pre-approved by the franchisor. This can limit your creative control to some degree, and you need to decide if you can exercise your creativity within the franchise structure.
Ongoing costs
While you will pay an upfront cost to buy into the franchise brand, you will also pay royalties as part of your agreement. Royalties may go towards technology improvements or marketing campaigns that wouldn't be your first choice on how to spend those dollars. There may also be times when business is going well and you would prefer to spend those royalties in another way.
Franchisors should always be open to feedback
from franchisees and you can always voice your opinions and suggestions to the company if you think there are better ways those dollars could be spent. With an independent business you are not committed to royalty fees, however, there is still a cost (in time and money) to grow the business and seek out these improvements which are critical to keeping your business sustainable. What is it worth to have that done for you?
Leadership can change
As you evaluate franchise options, you will meet different members of the franchise leadership team. While they can be impactful people, they can also move out of that role through retirements or other opportunities. Your decision on whether or not to become a franchisee needs to be founded on the structure of the franchise so that if turnover happens in leadership roles, you are still comfortable in the business model of the organization.
A franchise consultant can help
Managing the pros and cons of franchise ownership can seem difficult to discern at times. A franchise consultant can help you understand how your motivation to become a business owner fits with different franchise options.
Franchise Consulting Company is the world's leading franchise expert and they work with interested franchisees to explain the responsibilities and rewards of this type of business structure. They find that the best franchisees are very self-aware and know what they want in a business, but sometimes you need an expert in the field to help you arrive at those decisions.
Franchising is a great way to become a business owner and franchise consulting
can help you choose the option that is best suited to your interests and long-term goals.
