Becoming an Entrepreneur by Buying a Franchise
Buying a franchise is becoming one of the most common strategies to set up one’s own business. When you buy a franchise, you buy the rights to operate a local branch of an established national or international business and pay a share of revenue as royalty to the franchisor. Many global fast food chains and retail chains operate as franchises. Buying a franchise involves meeting the criteria of the franchisor including financial stability, experience and managerial resources. Once the franchisee meets the criteria and pays the franchise fee, he or she is provided training by the franchisor and can operate an independent franchise.
A Quick Way to your Own Business:
For those who are itching to start their very own business and be their own boss, buying a franchise offers the most convenient and shortest way. Running a franchise offers a thrill to those who seek independence from a routine office life. As the owner of a franchise, you get to make key decisions about operational and tactical matters. All that needs to be done is submit an application to the franchisor and have the necessary resources to set up the business. Even young people with little experience but adequate resources can set up their own business instead of working for someone else.
Strong Management Support:
One of the significant benefits of buying a franchise is that the franchisor is always available to offer support for managing the franchise operation. The support begins right from the time the application is accepted. The entire business model is placed at the disposal of the franchisee and trainers from the franchisor guide the franchisee every step of the way until they become fluent with the business model. In this way, there are fewer risks of failure and the franchisee can start running the business smoothly from day one.
A Recognized Brand:
The franchisee gets access to a brand that is recognized in several countries by signing up for a franchise. The benefit of buying a franchise is that the franchisee does not have to invest a lot of time and effort in creating awareness about a new brand. Most potential customers can be expected to have experienced the brand during foreign travels or through the media. Therefore, the franchisee is assured of a significant number of potential consumers who would want to try out the brand in their own country. This benefit is not available with creating a new business from scratch.
Balanced Risk and Opportunity:
Buying a franchise offers a sensible medium between blind risk and opportunity. While the franchisee is authorized to make business decisions for the growth and daily operations of the business, the power to make strategic decisions lies with the franchisor. In this way, the franchisee is prevented from taking decisions that could pose a threat to the profitability of the franchise. Moreover, since the franchisee is required to pay the franchisor from a share of its revenues, there is a strong incentive to increase revenues and profitability for the franchisee.
With a franchise operation, the franchisee is able to overcome or avoid competitive threats in the market. Usually if the franchise is a foreign brand, customers are likely to prefer it over local brands, giving a strategic advantage to the franchisee. Similarly, buying a franchise offers the opportunity to create a market for a new product, for instance, buying a pizza chain franchise in a market where there are none. In such cases, the franchisee gets the first-mover advantage and can run a business for some time without facing competition. Another benefit is that the franchisor would not allow another franchisee to operate a franchise within the same territory as an existing franchise.
Through franchising, the franchisee gets access to high quality systems and products. Usually, these systems have been tested and refined over the years, thus increasing the potential for success in the new market. The franchisee does not have to develop new systems or products and can devote his or her time to managing the operations. Consumers also tend to trust a franchise business because it assures them of consistent product and service quality, especially if they have encountered the brand in other countries.
Franchising offers exciting opportunities to grow as an entrepreneur and earn high levels of profits within a secured system. Buying a franchise can be a rewarding decision for entrepreneurs who are comfortable with working within a system of defined procedures and operations without feeling constricted. Running a franchise is a great learning experience for new entrepreneurs, especially in areas of operational and human resource management, customer engagement and promotional strategies, and financial management. At the same time, to run a franchise successfully, the franchisee needs to be flexible, keep an open mind, and follow the franchise standards meticulously.