Top Reasons to Buy a Franchise

Sunday, May 6, 2018
The Balance Small Business

Buying a franchise can be a life-changing experience. Make sure it's a positive experience by doing your due diligence before signing a franchise agreement. A properly designed and executed franchise system can be an exceptional method of expansion, but franchise systems that are poorly designed or not well managed are to be avoided. Below are the top 10 reasons to consider investing in a franchise.

#1 AN Existing Franchise Is a Turnkey Business

Many entrepreneurs have the skills to run an existing successful business but don’t have expertise in all it takes to get a business up and running, whether that's obtaining financing or negotiating lease terms.

Buying an existing franchise in a well-designed system can eliminate much of the hard work: choosing a territory, finding a location, negotiating a lease, finding reliable contractors to complete a build-out on time and on budget, establishing vendor relationships, etc. You may also be able to start a business with trained staff already in place.

But, you will still need to do your homework - aside from the transfer fee, your fees and terms may be substantially different than the sellers.

#2 Proven System in Place

When you buy a franchise, you buy a system - an entire method of doing business. Franchises have an established system in place that you must follow to distribute the franchisor's products or services using the franchisor's trade or service marks. Having a proven system already in place eliminates the guesswork and errors a common business owner would normally face.

In addition to exercising some control over franchising operations and the franchisee's adherence to brand guidelines, the franchisor provides the franchisee with franchising leadership and support.

#3 Corporate Image and Brand Awareness

If you buy into a franchise system that is already established, the corporate image and brand awareness is already recognized. Customers are usually more comfortable purchasing items they are familiar with and working with companies they already know and trust.

In the consumer's mind, a franchisor's brand equals the company's reputation. Great franchisors want to ensure that their customers are satisfied every time they shop at a franchised location and that the franchisee delivers on the franchisor's brand promise.

#4 Higher Likelihood of Success

Buying a franchise is very different from starting a mom-and-pop business. Since there is an already established system in place, there is a higher likelihood of success. If you invest in a proven franchise opportunity and follow the system the franchisor has put in place, you should be on your way to running a  successful business.

#5 Easier to Obtain Financing

Lenders are usually very comfortable financing the purchase of a franchise, because franchises already have a proven track record. Bankers usually look at successful franchise chains as having a lower risk of repayment default and are more likely to loan money based on that premise. In addition, some franchise systems will provide in-house financing and/or leasing options. Many systems also offer special discounts for veterans, via the VetFran initiative.

This article continues with reasons 6 through 10 at  The Balance: Top Reasons to  Buy a Franchise.

 

 

Contact our Franchise Development Expert:
Kim Stevens
847.804.6512
kim@woodhousespas.com

 
 
 
 
 
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