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Is a Franchise Right for You? - The Advantages of Franchising

Starting a business requires you to complete a number of steps and make some key decisions. Though part of your overall plan, you?ll need to decide on a business structure, and obtain the necessary licenses and permits. In addition, determining which financing options will meet your short-term needs and long-term goals is crucial.

One of the ways in which you can successfully start a new business without having to do a lot of the planning work is to buy into a franchise. Franchises are companies that are very well known and have many chain stores across the nation. You essentially pay the company to start your branch of their business in your community. Some of the most well known examples of franchises include McDonald's, Sonic, and Terminix. Many other companies are also franchises, and this is especially popular in the restaurant business. Before starting a franchise, consider the disadvantages of such a deal, but remember that there are many advantages as well.


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In starting a small business you should never think you can do it alone! One of the best ways to insulate yourself against business failure is to find and work with a mentor, someone with business experience who can guide and assist you.

A good resource is the Service Corps Of Retired Executives (SCORE) which can link you to retired professionals who are available to give you advice.


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First, you rarely have to do as much advertising with a franchise company as you would have to do on your own. The company is already popular and people know what to expect when they visit your business. For example, you don't have to create your own Burger King advertisements or television commercials-the corporate company does that for you. You simply need to let the people in your community know that a new business option is available. Even if you wish to create advertisements for a local paper, for example, the company probably has pre-set guidelines for you to use and, even more likely, a graphically designed advertisement already created. All you have to do is insert your own information, like address. The work is done for you.


With a franchise, you also build off of the company's overall success. That is, what the company does well across the country, so will you in most cases. You don't have to worry about developing new business goals or coming out with new products. With the Burger King example, for instance, the corporation will introduce new food products as the company does well overall. You simply order what you need. Again, the work is done for you.


The market research is already done for you as well. You can see if a company has been successful over time before buying into it. You can also get corporate reports describing consumer demographics. This helps you decide if this type of franchise will succeed in your community. There's less guesswork here than with other types of businesses, and ultimately, if your business fails, you will be able to dissolve your branch of the franchise with less personal loss. It is also easier to sell a franchise to another would-be business owner if you decide it is not right for you. Consider the franchise option. The choice is not good for everyone, but if you want to start a new business with less of the work, you may benefit from a franchise option.


About the Author: Michael Saunders has an MBA from the Stanford Graduate School of Business. He edits a site on Starting a Small Business and is president of Information Organizers, LLC.




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