When starting your own business you should carefully evaluate if you should buy a franchise. Franchises have complex requirements and should only be pursued if you have the time, money and inclination for this business line. However, a franchise should not be ruled out out-of-hand as franchises also take a lot of the individual work out of creating a business plan, marketing and brand identity. Franchise opportunities can work for those who strategically plan, understand the marketplace and use their location to their advantage.
Cons of using a franchise model to start your own business
Let’s face it. When you use a franchise, you are locking yourself into someone else’s business framework. You often don’t get say over the business product, its looks, its marketability, sometimes even your own advertising. You are boxed in to the requirements of the franchise. This can be frustrating to the new business owner because often a prime reason for starting your own business is to have control over your work. Using a franchise can also require a time allotment that you do not have. To operate a franchise, many groups require expensive training trips which take up time that you could otherwise devote to local issues. Finally, the cost of franchises can be overwhelming without start up cash flow. Some franchise costs exceed $250,000. This can be out-of-reach for many looking to start their own business.
Pros of using a franchise model to start your own business
Franchises could be the right fit, though, if you would like a business structure that you do not need to develop. Franchises often take care of advertising promotions, name branding and other marketing so you can focus on your business operations. Franchises often come with the air of profitability and an understanding from the consumer of expectations of the company. There are fewer surprises to both the consumer and operator of a franchise, as work is set to a standard. Franchises supply manuals which walk you through what you need to create a profitable business as well as contacts with those who have made money in the same business line. This amount of hand-holding in operating a new business is attractive to some people and worth the costs.
Evaluating your business ideas and franchises
To truly understand your desires in starting a new business, you need to clearly outline what aspects of a new business you enjoy and what strengths you possess. If you enjoy developing a product line, creating advertising and finding a unique product, ownership of a franchise may not be the best fit for you. However, if you like to follow a pre-existing business plan, you want to sell a product and have a company with a previous track record, and you have a considerable cash reserve, owning a franchise may be your best choice. Ask yourself the following questions:
a) Do I like to follow established rules to achieve an objective?
b) Do I need the security and guidance of a mentor?
c) Do I have cash reserves to spend on a pre-existing business?
d) Does purchasing a franchise achieve my personal goals and mesh with my personality?
If the answer to these questions is “Yes”, a franchise might be right for you!