The Beginner’s Guide to Owning a Franchise
If you’re new to business ownership, a franchise may be just what you’re looking for. Owning a franchise offers many of the same benefits as having an independent business, while also providing external support and guidance that may prove invaluable. However, there are also certain issues that arise in franchise ownership that do not apply to other new businesses. Knowing more about the pros and cons of franchises will help you in deciding whether to go for it, as well as choosing the right franchise for you to invest in.
A franchise can be contrasted to a chain store. While the latter operates under the direct ownership of a parent company, a franchise belongs to the individual business owner. However, a franchise licenses the royalties from its overarching company, including trademarks, logos and marketing content. In turn, franchisers are able to disseminate their brand widely, while reducing some of the risks of opening new branches.
Because it is in their best interests to spread, franchise companies often provide significant aid to new owners to help them get their business off the ground. This can include training in both management and technology for employees and owners alike. They also can provide advice, offering their business expertise to new owners. Some franchise companies also assist with financing, most often in the form of loans to cover startup costs, which can be more expensive for franchises than for other types of new businesses. Many franchises also have preferred or dedicated suppliers, allowing franchise owners to get their business up and running as soon as possible.
Most importantly, franchises benefit from the brand recognition of the parent company. Owning a franchise means that much of your work finding and securing a customer base is already done, and your business can participate in nationwide advertising campaigns from its inception.
In exchange for these advantages, franchise owners must obey the policies of the overseeing company, with only limited control over their local marketing and promotions. Employees will wear company uniforms, and general business practices have to follow the guidelines set down by the corporation. Moreover, major problems impacting the parent company will usually affect the franchises as well.
These limits in control can be as much help as hindrance to a new business owner, as they establish clear principles that are often essential to successful business management. For this reason, as well as the support and brand name advantage offered by the parent company, business beginners are recommended to look into owning a franchise.