When thinking about buying a business for the first time, a franchise may not be the first concept that comes to mind, but for many it may be the best choice of investment of all the options available. Though franchises may have less creative freedom than an independent business, the risks are also vastly reduced, making them a great place to try running a business with a great support network behind it.
As an already-established enterprise, franchises frequently have streamlined processes and resources for taking care of a lot of the groundwork involved in running a business. A lot of this work involves skills that are peripheral to the day-to-day operation of businesses, but are still essential to the business’ success. Having this groundwork already prepared means that new franchisees can focus on the business operation without distractions.
For the task of marketing, a large amount is prepared in advance and in place across a large region, making the brands highly visible and recognisable, with trademarks, copyrights and advertising guidelines already worked out. Bigger companies can afford in-house designers to constantly attend to the needs of the franchise and keep the business on trend, removing the need for you to consider outsourcing skilled work yourself. Most of your efforts will then be focused towards making your presence known locally, capitalising on the familiarity of the brand to direct foot traffic your way.
Alongside the advertising work, franchises will frequently have websites already, either presenting you with templates for you to work off for your own site or removing the need for you to create one completely. This reduces website setup and hosting costs considerably while still allowing you to benefit from the promotion that they generate.
While setting up a new physical location, franchises offer a wealth of assistance in handling the real estate and construction. Many franchises will help with store layouts, and often already have designs that are in line with their overarching branding while making use of the unique space your store occupies. Your store will also frequently occupy an exclusive territory, and though you may have competition from other brands and local stores, within your own franchise brand, your geographical area will be protected so that you can make the most use of profit opportunities for that business in that region. Franchises also often help with leases and legal agreements, are already familiar with considerations of the business, and have much greater weight in negotiations than an individual may have. This carries across to the purchasing power of the franchise. They will often help with starting equipment and furniture amongst other purchases, including ongoing costs such as inventories and uniforms. Bulk purchases and pre-established relationships with suppliers will mean that they can access goods at much better rates than independent operators.
Ongoing operational support includes help with staying up-to-date on all the latest industry news and regulations that may be relevant to you. Comprehensive operation manuals and training allow you to learn as you work, and risk reduction and management runs even more smoothly with all the information and extra minds put together in the organization. Though hazard-based risks will generally continue to be your sole responsibility, at many times, opportunities and uncertainties are shared with and shouldered by others. They are not eliminated entirely and it is always worth using your own judgement, but opportunities are especially made easier when you have a team working with you and invested in your success.
Though a lot of the risks are mitigated, franchising does not guarantee success and good management values of informed decision-making and hard work are still applicable. There are flipsides to all the benefits of franchising. Sharing in the positive reputation of others also means sharing in the negative reputations and the mistakes of others, and being affected by them. Restrictions on the location of your business in order to respect existing territories held by others in the franchise could be a potential flaw to some, as well as restrictions on the products you sell and suppliers, and sharing profits via franchising royalties – but the end result has the potential to be more than just a transactional trade-off.
Franchises grow through teamwork and community-building. Support and oversight allows the franchiser to share the collaborative efforts of each franchisee with all the others. Positive work cultures have a lot of room to flourish within such collaborative environments, creating happier, healthier workplaces that impact well on employee’s lives and job satisfaction.
When a store has been established and a franchisee feels satisfied with their journey within the organisation, they may move on from it to find their own way and set their own goals; or they may even grow within the organisation. Once one store has succeeded, some franchisees may have the chance to work with other stores and become a multi-unit operator. This offers the opportunity to develop high-level management skills and grow profits even further. Though it does provide upward mobility it’s worth approaching with a realistic understanding as to what it might require; more to manage naturally means more responsibilities and new challenges to time-management and work-life balances, so not every franchisee may take that path or fit that type of business ownership. In the end, though, the varying paths that franchising presents there make it a great place to find one’s feet as a business owner.