In part 1 of our Advantages of Franchising series, we looked at the advantages of franchising for a franchisor. Now it’s time to look at the benefits for a franchisee.
You may have been considering owning your own business but have been worried that you don’t have the complete set of skills to make things work.
You will no doubt have a lot of questions like:
- What will my business model look like?
- Who will take care of the marketing?
- Will people want to buy my products?
- What if things go wrong?
Being a franchisee takes a lot of this weight off your shoulders, since a lot of the hard work has already been done for you. While it does take some time, effort, and start-up capital to get your outlet open, there are a lot of benefits to becoming part of a franchise.
Brand awareness already exists
Starting your own business from scratch means that no one knows you exist. It can take months or even years to start to build up a reputation and have a loyal stream of customers. Since a franchise business has already been around for some time, customers will know the brand and be more willing to buy from you.
When you put your money into a new business, you want to make sure that it works as soon as possible to see a return on your investment. Rather than playing around with business models and finding the right products that sell, you can rely on what the franchisor has put in place and established as being a successful business. Perhaps they learnt the hard way, but as a franchisee, your risk is reduced or even removed.
Learn how to do things the right way
Setting up a business can be a steep learning curve, with so many varied factors to think about. It is in a franchisor’s best interests to see their franchisees succeed and promote their brand in the right way, so they will provide as much training and support as you need. It’s certainly nice to know that there is someone around that has your back and will help you out with any problems that arise.
Get better deals with suppliers
Franchisees have a great benefit when it comes to dealing with suppliers as they can band together to form their own buying group – something that wouldn’t be possible as a standalone business. One franchisee of the BedShed discovered that by sharing sales figures with other outlet owners, they were able to bring costs down by purchasing in bulk from their wholesalers and manufacturers.
Less setup time
Having a business model, products, and branding already in place means that there will be a lot less time between signing a contract and opening the doors. You’ll also save time down the track as your franchisor will be the one responsible for managing franchise promotions, rebranding, and product changes.
Even though there are many great benefits of franchising, it’s good to take both the pros and cons into consideration. Keep an eye out for our next post, where we will examine the disadvantages.