Why do people buy franchises? Because the franchise is a defined and proven business format that offers any aspiring business owner the opportunity to run their own business with an established formula, training and support from the corporate headquarters. Franchising is about taking and building a concept that’s already been developed and duplicating. Franchisors such as Dunkin’ Donuts and Kentucky Fried Chicken standardized the presentation of their products and the services that go along with them – the core of the franchising format and why it’s successful.
Proven System Makes Franchising a Success
Many franchise operations began with one person that owned their own independent business, refined it and proved to others that the business could be successful for them under a uniform system that new locations follow to create a positive public image and identification. This is the foundation of a franchise.
Today, franchising has become big business with major companies buying and selling franchise systems like deed cards on a Monopoly board. It’s a proven format that’s lucrative, which is why the failure rate of a franchise business is far lower than that of a small business that doesn’t have the support of a franchisor.
Specialization Makes Franchising
Franchising has been successful in our modern economy because it caters to specialized needs – places that do it better than says the service station performing oil changes, local barber cutting hair or pizzeria delivering a pizza within 30 minutes if you’re lucky.
Specialists focus on a specific product and/or service that a person needs. The success of modern franchising depends on finding ways to meet the ever-changing needs of affluent consumers that has led to hundreds of new franchisors springing up from the ground. Through sales expansion to independent parties that become franchisees instead of investing own capital, franchise organizations have thrived, who have in turn used the money saved to develop new and better ways to serve the consumer’s specialized needs.