Most entrepreneurs do not fancy the idea of franchising. This is because it involves purchasing rights of existing business models and products which is risky, especially in determining the success of a franchise. Nonetheless, opening a franchise gives you an opportunity to operate an established brand and business model. Here is what you need to learn about franchising.
A franchise is a company that decides to sell the rights to its existing business model to another entity. In this business model, you get to sell ready-made products. It is estimated that buying a franchise between $50,000 and $200,000. Startup costs include; corporate fees, accounting fees, attorneys’ fees, permits, and taxes among others.
Factors to Consider
Franchising also entails following a set of regulations stipulated by the Federal Trade Commission (FTC). For example, franchisers are expected to provide a franchise disclosure document (FDD) to the potential franchisee. Relationship and registration laws also govern the operations of a franchise. Other aspects to consider are;
Level of business autonomy
Type of business model
Level of interest
Pros of Franchising
Firstly, you get to have a business that has a unique mixed business model. This means that you lower the risks involved in operating a business. This is mainly attributable to the increased level of surety in franchise success.
The second benefit is the ease of accessing funding such as small business loans. This is due to the low risk involved to financial institutions such as banks. Additionally, you get to secure high rewards. Subsequently, you get to have professionals who walk you through various aspects of running a franchise.
Having looked at the benefits, it is crucial to note key sectors with potential in franchising. They include but are not limited to fitness, commercial cleaning services, hair salons, and senior care.
There has been an increase in franchises countrywide. This is linked to the benefits associated with franchising. If you are looking for a franchisee training program, feel free to contact our team of dedicated professionals.