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Franchise Prospector » Franchising & You
Why Buy A Franchise Business?
Five Great Reasons to Consider Purchasing a Franchise of Your Own
While many people incorrectly equate the purchase of a franchise with a business venture that either requires massive amounts of money to buy into a well-established company such as McDonald's or one that has an associated high risk of being "scammed," the reality is that a suitable franchise business truly does exist for everyone... and yes, we do mean everyone. If you find that hard to believe, we suggest that you browse through the more than 1,000 franchises (a small percentage of those that actually exist) that are listed on this website (Franchise Opportunities). From Geeks on Call that offer "on-site computer solutions for businesses and residential customers," to unique home-based franchise opportunities, we're fairly certain that you'll find a few listings that add a spark to your dreams of being self-employed.
OK... so you find a business opportunity that interests you or maybe you already have a business idea in mind that you'd like to pursue. That doesn't answer the question as to why you should consider buying a franchise. What follows is a general list of what we believe are the main selling points associated with purchasing a franchise.
You're buying into an idea that's already proven to be successful. The groundwork has been laid, the initial hurdles have been cleared, and the business has proven its validity. While future success isn't a guarantee, the critical start-up stage of the company has not only been conquered, but the business has succeeded to the point of being able to branch out into franchises.
The management of the business has already been formulated. The need to make critical business decisions isn't an issue that franchise owners often experience. From product selection to marketing, the choices have already been made. It's simply up to the franchise owner to carry out the day-to-day business operations.
The support network is already in place. You're not "in it alone" when you're dealing with a franchise that offers critical training and guidance. If you have a question, the parent company is often just a quick telephone call away. It's simply in the best interest of the parent company to ensure that its franchisees receive the support that they require to remain in business. There's also little need to spend critical work hours networking to get the business up and going or to keep it progressing forward. That equates to having more time to focus on keeping the business operating smoothly.
Your chances at receiving business financing are greatly improved. While it's true that franchises potentially require a greater initial investment, lending agencies are generally more comfortable bankrolling an idea that's already been proven. The franchise's parent company will also often assist you in the potentially overwhelming process of financing your business dream.
Franchises are less likely to fail compared to other small businesses. According to statistics published by both the United States Small Business Administration (SBA.gov) and the United States Department of Commerce (DOC.gov), success rates for franchises are significantly higher than non-franchised businesses. While more than 62% of all new non-franchised companies studied by the SBA from 1978 to 1988 ceased to exist within the first six years of operation, from 1971 to 1987, the DOC reported that fewer than 5% of franchised businesses closed on a yearly basis. Perhaps most striking of all though are the DOC findings that more than 90% of franchises continue to operate after five years versus less than 25% of privately owned companies.
With reasons like these, perhaps the question should be, "Why wouldn't I buy a franchise business?" If you're seriously considering going into business, don't overlook the idea of purchasing a franchise. For many people, it's the best option that exists.
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