There are many different methods on how to start a business, but doing so from scratch can prove to be the hardest and riskiest way to go about the task. Franchise opportunities can significantly reduce the burdens and dangers associated with building an establishment from the ground up.
For individuals who are clueless on how to start a business, let alone manage it, most franchisors take care of this issue quite well through training programs and regular seminars. Also, doing so should ideally help the franchisees minimize their operating costs, as well as maximize potential revenue.
However, some franchisors tend to “hype” the benefits of being a franchise owner, while downplaying the potential disadvantages at the same time to sell their products better. That said, there’ll always be good, bad and even surprising aspects with being a franchisee.
The Good
There are plenty of benefits to be reaped from different franchise opportunities for businessmen, but they all share several advantages in common, such as having a reputable and trusted brand name. Another would be the benefit of having reduced advertising costs.
Regardless of the fact that more affordable and superior advertising strategies are utilized, the product itself should sell very well without it, since the brand name has already been established.
Moreover, an effective system of running the business has already been setup. Should anything go wrong, assistance is always made readily available through a team of experts back at the corporate office.
The Bad
One disadvantage that comes with being a franchisee is the need to buy the product line that’s sold to customers, which can lead to lower revenues than that of what was expected by the owner. Though the brand name is well-known, some franchises have products that aren’t, or occasionally roll out new merchandises.
With smaller franchises, franchisees may have to spend more on marketing the unknown or new goods just to make them “click” with the market.
Another setback (in a relative sense) is the need to answer to the franchisor. This can hurt the ego of some entrepreneurs, mainly because a big reason why they engaged the trade in the first place was to become their own bosses.
The Surprising
A big surprise that has struck many franchisees is the level of support rendered by the franchisor, which is topnotch. Not many owners expected the assistance to cover every aspect of their businesses, and also provide comprehensive solutions for any problems that arise.
Other franchisors seem to charge too much for the products sold to customers, which has bothered some franchisees. On the other hand, other branded establishment owners claimed that nothing really caught them by surprise, since ample research on their franchises was conducted beforehand.
Conclusion
The amount of advantages and disadvantages involved will vary amongst the different franchise opportunities, and the buyer’s ability to handle such businesses. Before selecting and purchasing any franchise, thorough research needs to be conducted on both the company and the industry it competes in to ensure financial success, as well as a better management experience.
Purchasing from the right franchisor will always be better than learning how to start a business from scratch, and taking the necessary measures to ensure the establishment’s success plus survival.