Is Buying a Franchise Worth It?

The Allure of Franchise Ownership  

One of the major attractions of buying a franchise is starting a business without starting from scratch. Instead of worrying about products, marketing strategies, or brand recognition issues from the start, franchising is an established system with proven results. You could become the owner of your own McBurger's location (because uniqueness is overrated) with access to an instruction manual describing exactly how you can turn profits into earnings. Sounds like a dream? For new business owners it can seem that way. As with anything, franchising isn't about reinventing the wheel. Rather, you're simply learning its movements. Plus, franchises usually provide training, support networks, and bulk purchasing power that can ease many of the obstacles new entrepreneurs encounter. But here's the thing, not everything will go as smoothly.

The Price Tag and Ongoing Fees  

Before setting your sights on franchise empire success, take an honest and realistic assessment of the costs and ongoing fees involved with owning one. Franchise fees may range anywhere from several tens of thousands to hundreds of thousands depending on the brand you choose. Setting up your business will incur further expenses, such as equipment, inventory and rental spaces. But expenses don't end there. Franchisors usually take a percentage of revenue or charge a fixed monthly fee as royalty fees. Many require advertising contributions no matter how successful (or tight) your business becomes.

Pros and Cons of Playing by the Rules 

Joining a franchise provides you with a structure of rules, guidelines, and systems designed for success. For some this may be ideal. There's no need to figure out marketing campaigns, product sourcing decisions or customer targeting yourself as everything comes prepackaged. And with help from enterprise SEO services you can easily gain new customers. But for others this structure can be restrictive. Maybe you have an innovative idea on how to promote your business or want different sourcing products but the franchisor has decided what works best and won't budge on this one decision. 

Risk Assessment  

Franchises can help mitigate risk, but they don't eliminate it entirely. Your success as a franchise owner doesn't depend solely on location, competition, market trends and brand recognition. Pick your franchise carefully or be careful. Because choosing poorly could bind you contractually into an ineffective system which takes over all your income-earning capabilities whereas a well-run reputable franchise may give an edge in competitive markets (provided you put in the work necessary for its growth). Being an owner doesn't mean sitting back and collecting checks in return.

Conclusion 

Joining a franchise is like becoming part of an exclusive club. You gain membership benefits such as brand recognition, support systems and established frameworks, but must abide by its rules as well. While franchising might offer some protection from taking the plunge into entrepreneurship without making too many sacrifices immediately, for others it might feel too restrictive to truly call the business their own. Whatever decision you make, do your research first before making one. Doing your due diligence could lead to success, or at the very least provide many great stories along the way.

Photo by Keshav Singh Panesar on Unsplash