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Originally Posted On: https://sites.psu.edu/socialtrends/2023/05/08/why-people-buy-franchise-businesses/
We live in an entrepreneurial world. If you have a go-getter attitude, then you’ll have plenty of opportunities to put your talent and hard work into practice and try to build a comfortable life for yourself. While many people believe that entrepreneurship involves starting their own business, there are other options available to you. One such option is to buy a franchise business, whereby you buy a license to open a branch of an existing business.
If that sounds good to you, then you’re not alone. Many other people have decided to take this path and with good reason. In this article, we’ll run through some of the key reasons why you may consider opening a franchise business of your own.
There’s Less Risk
Opening up a new business can be successful, but it’s far from guaranteed. In fact, of the two options, failure is more likely — around 50% of new businesses close within five years. The success rate for franchise businesses is much higher. And that’s because the business will already have been shown to be successful — the business was already a success in other areas, so it’ll probably be successful in the area that you’ve chosen, too! This makes it a much less risky proposition than opening up your own business.
People Know the Business
With new businesses, the risk of failure isn’t because the concept behind the business is bad. It’s just that no one knows that it exists. It can take a long time to get customers, who are more predisposed to give their money to brands that they already know. When you run a franchise, you’ll be one of those familiar brands. This can help you to get customers from day one since people will know who you are and what you have to offer.
It Can Make Marketing Easier
Everything to do with marketing can be challenging. And yet, it’s one of the most important. You need to have strong marketing in order to get results, and by the time new business owners have figured out what they need to do, their business is already on its way to the graveyard. When you buy a franchise, you’ll typically be given all the marketing materials you need, since they’re generally the same from store to store. The franchisor may also promote your business for you.
There’s Often Support
When you buy a franchise, you’re getting more than just the right to use the brand’s name, logo, and colors. You’ll also get ongoing support that can help to make the task of making the franchise a success easier. There’s a lot of comfort in knowing that there’s someone who can answer your questions if it ever feels like you’re getting stuck, or if you have an idea of how to improve your business and want to get some feedback before putting it into practice.
There Are Diverse Opportunities
There are nearly as many franchise opportunities as there are businesses you could start. Indeed, there’s no shortage of franchise businesses to get started — you could start a recruitment, sports, business training, investment, events, fitness, or food franchise, to name just some of the many options available to you. To get a sense of what’s out there, take a look at the Franchise Local website, which lists more than 400 opportunities. The chances are, you’ll find something that catches your eye. From there, it’ll be all about investing in the franchise thoroughly and deciding whether it’s the right one for you!
It’s Challenging
We’ve made a point of saying that opening a franchise is easier than starting a new business, and that’s generally true. However, it would be wrong to say that running a franchise is easy. It’s most certainly not, and that’s a good thing. This is a big part of what makes it so appealing to people that have an entrepreneurial mindset — they’re able to put their intellect and work ethic to good use, while also having the comfort of knowing that this method of running a business is less risky. If you’ve always wanted to test yourself in the business world, but don’t quite want to — or can’t — start a new business, then starting a franchise business may be the way to go.
Faster ROI
There’s a financial investment involved in opening a franchise business, just as there is when you start a “regular” business. However, it’s important to note that, in general, franchise businesses bring a much faster ROI compared with other businesses. With traditional ventures, you’ll have to spend a lot of money and then hope that you can build the client base, which could take years. You’ll have to assume that you’ll be taking a loss for at least a couple of years. With a franchise business, you’ll begin earning money faster than, because the customer base is already there.
There’s an Exit Strategy
Once you’re up, running, and successful, it’ll be unlikely that you’ll want to sell your franchise anytime soon. However, if you do decide that it’s time for a change, then you can have peace of mind knowing that you should find it easy to sell your franchise. Franchise businesses are popular, so you should be able to find someone to purchase it from you without much difficulty.
There’s a Track Record of Success
Businesses can fail because they made one or two errors. When you buy a franchise business, you’ll know that it’s a workable, successful model. All the problems will already have been taken care of before you arrive.
Conclusion
As we’ve seen, there’s much to love about franchise businesses. While success in this field is far from a slam dunk, it does make things easier. If you’re thinking about starting a franchise business, take a look at which ones are available to you, and pick one that interests you. You might just find that you’re able to put all of your entrepreneurial talents and hard work to good use and build a business that provides a solid financial future.
