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Franchise News
The Benefits of Owning a Franchise 9/8/2008

Do you dream about opening your own business and becoming The Boss? 


It’s a common goal, but there are plenty of downsides to starting a company from scratch, one of the most critical being that it takes tons of time and planning (and more than a little luck) to eventually turn it into a profit. 


Of course, some entrepreneurs don’t mind plunging into the swirling waters of the marketplace without a flotation device; for them, the choices of sinking, swimming or treading are thrilling.  Unfortunately, many of them “drown”.  In fact, according to the Small Business Administration, around 50% of all new businesses close their doors within the first year.


Fortunately, there’s a better way to own a company that has more than a 50/50 chance of succeeding in our global economy—invest in a franchise operation.  Over the past five years, almost 86% of all franchises that opened are still in business, an attractive reality for anyone who wants to make his or her investment dollars multiply.


Four of the many advantages to putting your capital toward a franchise are particularly substantial: recognizable brands, proven business operations, straightforward investment figures, and well established profit margin expectations.


Recognizable Brands


A company’s brand image must be firmly ingrained in the consumers’ minds in order to influence their future buying habits.  Successful franchises such as Subway, Jiffy Lube and The UPS Store spend millions of dollars in advertising to remain at the top of prospective customers’ thoughts.


It can take years for a start-up company to establish a brand.  During that time, substantial amounts of money must be spent on marketing… and there’s no guarantee that the brand will have the necessary “stickiness” to weave itself long-term into the buying culture’s collective psyche.


When you invest in a franchise, you essentially “skip” the initial branding process.  This means when you open your company doors (whether brick-and-mortar or virtual), expectations of service and brand trust will already be in your clienteles’ heads. 


Though you’ll be required to substantiate your franchise’s brand imprint, you won’t have to invent it.  Consequently, much of your initial publicity campaigns can be spent on selling your product and/or service, rather than branding it.


Proven Business Operations


Franchisors customarily supply all franchisees with comprehensive business plans and training manuals to ensure that all operations are streamlined throughout their network of franchises. 


Rather than developing a business plan, employee handbook, human resource guidelines and similar items on your own, you’ll merely have to follow one that is outlined for you.  As a franchisee, this becomes a huge timesaver; after all, these guides and documents help owners manage a 21st century company.


If you had to compile your own operations manual, you would be forced to rely on “trial-and-error” management.  By eliminating this step, you’ll save large chunks of time that can instead be spent on hiring, managing, and working toward increased profit margins.


As an added benefit to becoming a franchise operator, franchisees typically have the opportunity to share business strategies with the franchisor as well as each other.  Thus, the overall franchise is strengthened by their combined input and future processes can be simplified for maximum efficiency and productivity.


Straightforward Investment Figures


As you begin to investigate the over 1,500 franchise options available to you, you’ll find that investment figures are generally laid out quite clearly, helping you identify exactly what type of franchise will best fit your aspirations… and pocketbook. 


From the very beginning of your relationship with any franchisor, you’ll be shown the anticipated outlay of money necessary to become a fully functioning franchise operator.  Alternately, if you were to start your own company, you would likely find yourself bombarded by unexpected expenses, all cutting into your gross receipts.


Certainly, you can’t know exactly how much any business will cost, as there are always variables (e.g. geographic location), but investing your dollars in a franchise will give you a practical indication of exactly what your financial outlay will be over the next few years.


Established Profit Margin Expectations


When you open your doors as the business owner of an independent company, you have very little foresight into the profitability of your enterprise.  Though you would have a general sense of when your corporation “should” be operating “in the black”, your estimation would simply be an educated guess.


Franchising is different. 


Franchisors spend a sizeable amount of time updating their financials so they can help franchisees understand when most of their franchise owners begin to realize a profit.  Whether it’s within six months, a year, or more, this foreknowledge will enable you to put aside the appropriate amount of savings so you aren’t “roughing it” during the start-up phase of your organization.


Franchising - Beneficial on Many Levels


Though there is no magic spell to ensure that a company will succeed, franchises have a much better chance of making it in today’s competitive, global marketplace.  The benefits are substantial… and bankable. 


When you’re ready to learn more about the world of franchising, contact a MatchPoint Network™ representative for more information and to start you on the path to entrepreneurial fulfillment.

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