U.S. FRANCHISING FACTS
· It is estimated that franchising creates 18 million jobs
& generates $2.1 trillion to the economy
· Approximately 1 out of 12 businesses in the US are
· The franchising industry accounts for approximately 40% of
· A new franchise business opens every 8 minutes of every
· Most franchise companies have fewer than 100 units
· A study by the US
Chamber of Commerce found that 86% of franchises opened within the last five
years were still under the same ownership and 97% of them were still open for
All of the above makes a pretty good
case for considering a franchise when looking to purchase your own business. However, beyond the glowing statistics
of how franchising is a dominant part of our economy, one should consider the
specific reasons to purchase a franchise versus an independent business. Whether looking to open a new business,
or purchase an existing business, here are 8 solid reasons to consider a
franchise during the process.
Proven Business Model – A
proven franchise model, while never a guarantee, greatly reduces the risk
involved in business ownership. A
“tried and true” operating system is much easier to execute than a “one off’
model, and a quality franchisor will ensure that the business model changes
with the times as needed.
Brand Image & Presentation – an independent business person can always buy these services
through a 3rd party, but the expertise usually comes with a high
Store Design and Construction Model – most franchisors have the model developed to the point of
knowing the size of space needed, color and décor schemes, estimated finish out
costs and are prepared to assist you throughout the entire process. This will greatly reduce your time for
starting a new business. If you
are purchasing an existing franchise location, then you are able to compare to the
model that is currently being utilized.
Industry Training – It may
be very beneficial for a prospective business owner to stay in an industry in
which one has experience, but one of the great benefits of franchising is that
often direct industry experience is not necessary in order to be successful due
to the training provided by the franchisor.
Ongoing support and industry education – there are many aspects to being successful in business,
one of which is to embrace ongoing education and be prepared to change with the
times. A quality franchise
organization will provide the guidance to manage a successful business as well
as to stay abreast of the changes within the industry.
Pre-packaged marketing programs – most business owners have grand plans and desires to
improve their marketing programs, but often fall short in their execution. Some franchisors take on the burden of
marketing the brand directly for the franchise community, and most provide a
comprehensive package that allows for easy execution on the part of the
Purchasing Power –
depending on the type of business involved, the cost reductions that a
franchisor can provide to their network is often the single most powerful
reason to consider a franchise versus an independent business.
Synergy of a network – this
is often an under-appreciated benefit of a franchise brand. Most franchisors ensure that a system
is in place that allows for quick and easy communication amongst all the
franchisees. This allows for every
franchisee to benefit from the collective brain trust of the entire
There are many other
reasons to consider a franchise opportunity versus an independent business
opportunity. It is also important
to note that the franchise model is not for everyone. Franchisors do have restrictions and guidelines that some
people find limiting. There are
costs (royalties and advertising fund fees) to operating a franchise that an
independent business does not incur.
These issues should also be considered during your evaluation process.
If you have any questions about your business or if you are interested in buying or selling a franchise or privately held business yourself, please contact Larry Lane at 214-733-8282 or at firstname.lastname@example.org. Visit VR McKinney, Texas for more information.