Benefits of owning a franchise
Let’s review some of the basic benefits of owning a franchise. These are benefits a franchise owner can use to their advantage. Here are a look at some of these benefits.
Franchises are popular because consumers come back to what they know and love. If a consumer has had a great experience at one franchise location, they might want to go to yours.
Brand names are a powerful commodity. Many people don’t want to spend money trying something new if they have the option to buy from somewhere they know, love, and trust. As an independent small business owner, building brand awareness can take a lot of time and money.
With a branded franchise, a customer can expect the same product or service no matter where they go. For example, if you own a Subway, a customer knows they can expect close to the same sandwich they’ve had at another location.
The brand name is powerful. Do your research before committing to a certain franchise brand. See if the mission and values of a franchise line up with your own because customers will equate the values of the master franchisor with your individual franchise. You can talk with them about your passion and value system to help decide on a franchise.
Tried and true system
When you start a franchise, you know you’re employing a proven business method that has been in place because of it’s success. You are able to open a franchise location because of the success of the model, which can be very comforting for a new business owner.
The franchisor will or should know what operating systems work for their franchised businesses. You don’t need to put in the work experimenting with growing a entirely new business plan.
Low cost of goods
Owning and operating a franchise can significantly lower the cost of goods sold. Since a franchisor could have multiple locations, or even hundreds of locations, costs can be reduced. Print discounts and other bulk purchased services are examples. As a result of lower cost of goods, customers might pay less for certain products. That said, you still need to keep an eye on the cost of goods sold. Part of owning a franchise is making sure your business is turning a profit.
When you own a franchise, you are not alone. You have other franchise owners who might be experiencing the same challenges as you. And, you have a support team in the franchisor itself. If you need help with marketing, technology, or sales, someone is there to guide you.
Franchisors may also support franchisees with training, so you know that you (and your employees) will be able to run operations correctly.
When starting a business, you need money to put your idea into action. The same is true for starting a franchise. If you want to open a franchise, you need to pay an initial fee and startup costs, which could range from $5,000 to a tens or hundreds of thousands of dollars.
And, banks offer financing for franchises. In many cases, banks have more confidence giving loans to someone starting a trusted franchise brand than a new business.
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