A franchise investment helps you avoid many inherent problems with startup businesses and lowers the risk of failure. When you factor in all elements of selecting a franchise to invest in, emerging franchise brands are the best forms of investment opportunities in 2022.
Fransmart CEO Dan Rowe advises, “Get in early with unique concepts offering great unit economics, low startup costs, and longer runway to potential franchise buyers.”
You must consider the advantages and disadvantages before deciding on franchising. This article discusses the top reasons why choose franchising:
1. Low Startup Cost
Starting a franchising business requires initial investment costs that are considerably less than starting a business from scratch. This makes it easier for franchise buyers to own a franchise with less financial limitations.
In franchising, the franchisor sets the initial investment value at a fair price because they are assured of ongoing payments in royalties and marketing costs when your franchise becomes operational.
2. Access to Financial Support
It is much easier to get access to finance in franchising because it is a business with a proven track record. Investors and banks like stability and franchise brands offer that over a start-up business. The built-in brand recognition paves the way for a franchisee to take advantage of the strong brand identity and recognition to get funding.
Some franchises offer direct financial assistance through in-house financing and leasing options, while others provide referrals with a favorable disposition towards the brand.
3. Track Record of Success
Any good franchise brand must have an established reputation for past successes. As franchise buyers consider buying a franchise, they begin to ask questions about the past financial records of the franchise. You should verify this information before signing a franchise agreement with them.
4. Low-Risk Model
Franchising offers a low-risk business expansion opportunity. Franchising means investing in an established business plan that has been successful for many years. With a wealth of experience, you can limit your risk and increase your success rate. The operational success of the franchise brand takes away your fear of failure and the level of risk you take.
5. Corporate Support
One of the main reasons people like franchising is that they’re able to run their own business but have strong support from the franchisor.
Some Franchisors employ franchise consultant services such as Fransmart to complement their franchise development and provide professional insight to potential franchisees until launch.
Khuram Burney, a franchisee with The Halal Guys raves about the support given by Fransmart’s CEO Dan Rowe.
“There has never been a time I reached out via text, call, or mail when I didn’t get a response immediately or the same day even while he traveled,” he said.
Franchisees also gain access to a franchise community that offers advice and guidance. Dedicated and experienced franchise representatives are also readily available to assist franchisees.
6. Access to Training Programs
Before opening, franchisees are provided training from the franchisor. The training walks new owners through everything they need to know to successfully operate a location. Franchisees will learn the systems and processes of the franchise that they must follow. Franchisors offer training programs on accounting, marketing, budgeting, and management to help you succeed at your business.
Employee training is also provided to select staff members at the franchise stores. Both initial and ongoing training is provided to run your business smoothly and avoid pitfalls.
7. Brand Recognition
Franchising gives all franchise units access to an established brand name and trademarked logos. The company’s reputation for satisfying customers paves the way for a new franchisee to attract customers and enjoy a higher likelihood of success. For example, the yellow branding of The Halal Guys and the Neon signs of PayMore are obvious to exist customers and have the potential to attract new local customers.
8. Access to Marketing Assistance
Franchisees enjoy marketing support and an established marketing strategy. The franchisor spends a significant amount of money marketing the brand through advertising, publications, social media, and sponsorship to build overall brand awareness. Official marketing materials and collateral are provided to franchisees. However, this will not eliminate the need for local marketing strategies; it should only complement it.
9. Site Selection and Territory Protection
Site selection is key for any business, and this is one of the many benefits attached to franchising. Many franchisors offer their franchisees protected territories to minimize competition from other franchisees.
Franchisors provide advice on the best business locations for their franchisee through franchise consultants like Fransmart. Franchisors also have access to extensive databases, demographic research data, and experience in the site selection process to help their franchisees find the optimal location for their businesses.
For anyone looking to become their own boss, franchising offers a proven path. As a franchise consultant for over 20 years, Fransmart can help guide you throughout the franchising process.