Why buy a franchise?

With so many options available and all the potential pitfalls possible in buying a business or franchise, you may be wondering why you should invest your time and money in a franchise opportunity. To help you get an idea of some of the advantages you would enjoy as a franchisee, review the list below. As a franchisee, you will enjoy:

• Group advertising power
• Owning your own business and making day-to-day decisions yourself, guided by the franchisor's experience
• The ability to sell products and services to markets that cannot be serviced by company-owned outlets because of higher operational costs and lower motivation of employees in company-owned outlets
• The benefit of identification of service marks, trademarks, proprietary information, patents and designs
• Systematic training from experts
• A lower risk of failure and/or loss of investments that if you were to start your own business from scratch
• Being a part of an uniform operation, which means all franchises will share the same interior and exterior physical appearance, the same product, and the same service and product quality
• Assistance in financial and accounting matters from the franchisor, as well as ongoing support
• The enhancement of your management abilities and benefitting from an opportunity you could not have in most employment situations

In addition, you may wonder how to ensure that you make the best decision possible. Investing in your own business takes guts and the willingness to make important decisions. As a result, you will need to carefully research the statistics regarding new business start-ups versus the purchase of an existing business from a non-franchisor. Once you have done this, compare these statistics with research on franchised endeavors. What you find may be useful in helping you make a sound business decision and helping you understand why franchising may be more beneficial for you. Here are some helpful facts of franchising:

• The US Department of Commerce, in an early edition of Franchising in the Economy, cited statistics showing that franchising had increased phenomenally over the years and it was a significant part of the present US marketing system. Franchising offers tremendous opportunities to individuals and companies seeking wider distribution of their products and services. The US Department of Commerce also pointed out that retail sales from franchise establishments accounted for over one-third of all US retail sales.
• John Naisbitt, in the Naisbitt Group's The Future of Franchising: Looking 25 Years Ahead to the Year 2010 (1989), predicted that more than one-half of all retail sales would be made through franchise sales by the year 2010.
• Government research over the years has indicated that the success rate for franchise-owned endeavors is significantly better than the rate for non-franchise-owned small businesses.

In short, the good news is that franchising is a growing part of the national economy and presents a better chance for success to the new franchisee. The bad news is that not every franchise is a surefire way to multiply your savings and provide you with an enjoyable occupation.