Starting a business can be the key to financial freedom. It is hard work to maintain a company and to keep customers satisfied. Many businesses fail within the first year. This leads to the owner having a business for sale. For these reasons, some people choose to buy a franchise. There are several advantages to starting a franchise compared to starting a business from scratch.
A franchise has a lower failure rate because it is an established business and already proved successful. This type of business has a much better chance of surviving the first years compared to an independent company. If you are starting a new donut shop, the owner have to market the business and make the public aware of it. A person who decides to start a Krispy Kreme gets help with marketing and running the company.
Franchises are similar to turnkey businesses, which means they come with supplies, equipment, instructions and training. There is a possibility to receiving ongoing training, marketing and help with management. The company also reaps the benefits of the national marketing campaign. Supplies and inventory is another concern. Franchisors can benefit from the buying power of the national company. This relationship allows for buying supplies at a cheaper price.
A person that is starting an independent company has to locate a reliable supplier. It can take a while to find a good wholesaler who can provide the right products on time and for a reasonable price. Businesses can fail for different reasons, such as not making enough sales or attracting enough customers. A national company has an established customer base and known to the community. A company without an established customer base has to spend a lot of money and time on marketing. Most people are cautious about trying a new product or service. Companies have to attract customers to their product and get customers to recommend it to others.
It can be very profitable to own a franchise. McDonald’s and Taco Bell are good examples of profitable franchises. Every business is not successful for different reasons. Potential small business owners can benefit from researching and having enough startup capital.
There are risks and disadvantages with any business. Some people are against being a franchisor because of having do things the way of the national company. This business idea is great for someone with enough startup capital. It takes hard work and time to build a brand.