27 Jun The Pros and Cons of Franchise Opportunities
Finding the right opportunities and then pursuing those opportunities is key to success. Distinguishing between a great opportunity and one that should be passed on can be tricky. In this article we will look at the pros and cons of franchise opportunities. Finding one of the best franchises can be a true game changer.
Pro #1-Instant Name Recognition
Building a reputation can take years or even decades; however, thanks to franchising, it is possible to have not just instant name recognition, but also instant credibility.
Building a brand name takes tremendous time, effort and money. One of the key reasons that franchising presents such a unique opportunity, is that it allows you to have all of the benefits of an established brand without the tremendous investment usually associated with brand building.
Pro #2-Infrastructural Support and Knowledge
In addition to offering instant name recognition and credibility, franchising offers a second massive perk in the form of infrastructural support, advice and knowledge. When you buy into a franchise, you may also receive assistance in finding a location, expert advice, an owner’s manual and more. Simply stated, this type of support can prove to be invaluable in the launch of a successful business.
Con #1-Some Franchise Elements Are Locked in Place
When you buy a franchise, you will discover that some elements, such as costs, are essentially locked with no room for negotiation. Often, you will have to sign contracts and agree to specific procedures that you may not necessarily be in favor of following. In other words, you may be the boss, but the agreement you enter with the franchise means that there will be differing levels of rules that must be adhered to at all times.
Con #2-Ongoing Requirements-Royalty Payments and Appearances
A second potential con of franchising is that there may be ongoing royalty payments. It is important to keep in mind that even if your business loses money, you could still be responsible for royalty payments if your franchisee agreement has royalties involved. Some buyers are also surprised to hear that franchise agreements may require following certain appearance requirements, meaning that you could be required to remodel at certain intervals. Of course, all of these rules and regulations have been set up for a reason; typically, it all ties back to ensuring the financial success of the franchisees. That’s why it’s so important for buyers to connect with me so that I can explain how these policies work with any given franchise in consideration.
Ultimately, franchise opportunities come with tremendous benefits, such as name recognition and access to sales guidelines that have been proven to work, but there are also usually ongoing requirements as well. If you require a tremendous level of freedom, then a franchise might not be your best option. However, if you are looking for a safe investment, then a franchise could be the perfect fit.
Before venturing forth into the world of franchising, be sure to consult with a business broker for more insights. Feel free to reach out to me today, as I can help you understand how franchise opportunities work and help you decide what types of businesses might be the best franchises for you and your specific needs.
Copyright: Strategic Business Brokers Group