Why Should I Buy a Franchise?

I have been around franchises and franchising for over 15 years and have never liked the question above.  You buy a car, a TV, a new couch, or clothes for your children.  You invest in a franchise.   Here are some examples of the investments you will make:

1. You invest in a brand name.
2. You invest in a proven business model.
3. You invest in a network of support.
4. You invest your time, energy and money.
5. You invest in yourself.

You invest in a brand name.

The advantages of a brand name vary from franchise to franchise.  If you are getting involved in a franchise opportunity that is still fairly new, the name will probably have less value than that of a franchise that already has hundreds or thousands of locations.  A franchise with a well-known name offers many benefits.  Perhaps the most important is that you will have a built-in customer base before you even open your doors.  Consumers feel much more comfortable dealing with companies with which they are familiar.

You invest in a proven business model.

In my opinion, this is the most important reason to consider a franchise.  If you are reading this article, you should already have an entrepreneurial mindset.  Perhaps you have owned businesses in the past?  Perhaps you are looking to start a new business?  Perhaps you are weighing the benefits of investing in a franchise versus going it alone?  Having both owned a franchise and started my own business, I can tell you that the former had many benefits over the latter.

In addition to having owned businesses, I also spent a few years working for the largest computer training company in the world, which was built on a franchise model.  I can still recite the “five rules” and “eight absolutes” that were the basis for the sales model.  As a Sales Manager, I often referred back to the rules and absolutes for guidance in resolving conflicts and increasing revenues.

When it came to sales, courseware and content, we received a tremendous amount of training and support from the corporate headquarters.  There was a structure in place that allowed us to pursue national business from our local office and we often delivered instruction that was sold out of another franchised office.  This model benefited everyone involved in that we all shared in the revenue.  The selling location, the delivery location and corporate headquarters all received a piece of the pie.  Because we had over 250 national and international locations, we had a huge advantage over our competitors and eventually put most of them out of business.  This was the franchise model at its best.

You invest in a network of support.

In addition to those listed above, there are many other ways in which a franchisor can help your business become a success.  Even before you are up and running, most franchise companies are ready and willing to assist.  They can provide you with in house financing, or help you obtain third party financing.  Many will assist you in selecting the site for your store, should you go the brick and mortar route.  This is a great benefit in that most of us have little to no experience in such matters.  They may conduct a traffic count to see how much exposure a location may get and can also help you negotiate a lease.

Once you are ready to open the doors, they will often be there for the “Grand Opening,” providing guidance and support.  They may even spend a week or two at your location, continuing the training process and improving your odds of success.  Once you are up and running, they will be there to provide continued support, as your success is in both of your interest.

In addition to the corporate headquarters, you should be able to rely on other franchisees for guidance and assistance.  Remember, they have already been in your shoes and will be able to help you based on their own experiences.

By taking advantage of the support structure a franchise offers, you can then focus your time, energy and money on where it will do the most good.

You invest your time, energy and money.

Starting a business, any business, involves a significant amount of risk.  You will invest a lot of your time and should expect to have little spare time until your business is well established.  I was once asked by a colleague why I was earning three times that of he and his friends, who had all attended top-ranked schools and who were all highly paid professionals.  I simply explained that it was because I was working the equivalent of three full-time jobs!  I am a firm believer that you will take out what you put in.  Invest your time, energy and money wisely to ensure your success.

You invest in yourself.

While a certain amount of anxiety is normal when starting a business, you should be highly confident in yourself, your drive, and your abilities before finalizing your decision.

You will surely face many obstacles along the road to success and must have the strength to overcome them.  The computer training franchisee that I had worked for had made a major investment in the business, strictly followed the franchisor’s model and still faced the possibility of failure in his first year.  He wound up moving out of his home and into an off-season beach rental just to survive.  He once told me, “We are all just one step away from homeless.”  I keep this in mind everyday I wake up and it drives me to work harder and smarter.  The turmoil he faced simply motivated him.  He spent 16 hours per day at the office, working to find opportunities and to drive sales.  His efforts have been rewarded in that he now runs a multi-million dollar a year business and is financially set for the rest of his life! 

You should spend a significant amount of time educating yourself about the opportunity that you are about to pursue.  Do research.  Crunch the numbers.  Overestimate expenses and underestimate sales.  Reach out to existing franchisees (don’t be afraid to ask questions, as most are willing to share their experiences).  Not until you truly believe you will succeed, should you make that jump.  But once you do, go all out!