Some of the things that a franchise provides and a regular start-up typically lacks are:
- Proven business model
- History of success to build on
- Recognised brand
- Business System
By joining a franchise the franchisee, the person who buys into the franchise, gets access to the above success factors and can jump high up on the company maturity level right from the beginning. For these services the franchisee typically pays an up-front fee to start, has to make an investment and has to continue to pay a fixed fee or a fee dependent on turnover and profit as long as he or she owns the franchise rights for a specific territory. The franchisee must also abide by a franchise contract and, usually, a best practise manual that which is subject to changes at any given time.
But if the franchise has business in cities and countries all over the world with a proven record of success franchise contract limitations are well worth the risk, especially if it is a low fee franchise.
There are many well-known franchises, many of them with steep fees and high investment requirements but there are also many low cost franchises that nevertheless can be very profitable and much easier to manage and might thus be better suited for somebody making his or her first attempt at business.
The article “What Are The Benefits To Owning A Franchise?” was originally published on Fryday’s Business Blog.
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