Is A Franchise The Right Business Model For You?
If you are currently thinking about ditching your full-time job to become self-employed or a freelancer, you have probably already considered the different business models. After all, there is two right there: a self-employed sole trader or a freelancer. But those aren’t the only two options you have. For instance, you might want to set up your own small company and become a business owner. These three are the most common models that many self-employed people go for. However, there is another option that few people consider: buying into a franchise.
What exactly is a franchise?
It’s when you buy the rights to operate as a business and use its branding and logo. So, for instance, the majority of franchises are in the food and restaurant sector. The owners of a particular restaurant franchise might sell you the rights to their company’s whole branding, name, and anything else associated to it. You can then set up your own restaurant as part of their chain. The McDonald’s takeout restaurants are a famous example. Everyone who manages and runs a particular McDonald’s outlet will have bought the rights to do so from the McDonald’s corporation.
As you can see, there are some obvious advantages of setting up as a franchise business. For example, you will benefit from setting up a business that is instantly recognised and trusted by the public. However, there are some disadvantages that you will have to consider as well. One of the main ones is that you won’t benefit from the total profits - you will need to pay a percentage to the owner of the franchise so that you can continue to keep operating under the business name.
Now comes the big question - is running a franchise business the best option for you? Here are some things you need to think about before you can decide.
You Need To Be Willing To Follow A System
When you become a franchisee, you will have a certain amount of independence to run your branch as you see fit, but it’s also important to remember that there is a set system that you will need to follow. At the end of the day, the franchise has a system in place so that each branch is identical to all customers that use them. In order to be a successful franchisee, you will need to stick to this system so that your branch of business is the same as other franchises based in other towns and cities. If a franchise didn’t have any rules such as these, then it wouldn’t be a franchise at all - each branch would be an independent business.
It’s A Great Way To Test Your Entrepreneurial Skills
Some people like to use a franchise as a way of testing their entrepreneurial skills. This gives them the chance to see if they would be suited to setting up their own business completely independently from anyone else. This is because franchises do give the branch owners some independence, but there is still the system that guides them to success and acts as a slight security net for them. So, if you are considering setting up your own business, it’s worth thinking about trying a franchise for a couple of years to see how you cope with all of the responsibility that comes with owning a business.
Is Your Franchise Of Choice A Business You Will Enjoy?
Thankfully, there are thousands of different franchises out there, so you will certainly be able to find one that suits your personality and passions. I previously mentioned that franchises are a very popular business model in the food and restaurant industry, and you will certainly find that there are lots of possibilities in this sector. But that isn't the only industry where franchises are popular. Cleaning is another big sector for franchises, and looking at the Chem-Dry franchise sales, you can see that it’s a franchise industry that can bring franchisees some very big returns. It’s worth considering which sector or industry you would prefer to work in and then researching all of the different franchises that are available in that industry.
It’s Important To Be A People Person
As with any business, you need to be a good people person in order to be a success in the world of franchises. This is sometimes even more so the case when you are working as a franchisee. After all, it’s not just your employees and customers who you have to deal with - you also need to liaise with the owner of the franchise who is technically your boss. So, if you don’t consider yourself a people person, then this might not be the best professional route for you. However, it is something that you can work on. For instance, you might just want to work on your communication skills before you embark on a career as a franchisee. It might also be worth taking some training courses as well. In fact, there are a few franchise-specific courses that are aimed at those considering this line of work.
They’re Great For People Who Struggle To Find Finance
Once you have signed up for a franchise and have been given your own branch, you will find that it is very easy to get any finance that you need to run the business. That’s because any applications will be carried out in the company’s name and, in some cases, in the franchise owner’s name. You won’t be applying for finance and funding off your own back. Because of all this, it is relatively easy to find finance to get a franchise branch up and running. In fact, it is often a lot easier than finding finance for setting up your own business. So, if you have a poor credit history or often struggle to find finance from lenders for other reasons, it’s worth considering moving into the franchise industry. It could help solve all of your funding problems!
You Still Need A Support System In Place
One of the big things that most franchisees forget to do is put their own support system in place while they are running a franchise branch. And I don’t just mean a financial support system, although that will certainly come in useful at times. But it’s also important that you are getting enough support from your close friends and family. After all, franchising is a full-time job, and it could cause you to get stressed and work long hours. During these stressful periods, your support from your family will be invaluable as it is sure to keep you going!
Can You Afford It
Let’s not forget that it will cost you considerably to begin a franchise in the first place. As a franchisee, you will be responsible for the majority of the startup costs. This is something that the franchisor will be able to give you an idea of before you sign on the dotted line. You also need to have enough funds to run your branch until it starts to turn over a profit. Sometimes, this can take up to a year. For this reason, you might want to start saving so that you have plenty of money in the bank before you go into a franchise business. Don’t forget that you can’t take all of the profits home - a cut of them will go directly to the franchisor.
Franchising can certainly be a lucrative business form, but it isn't for everyone. Has this blog post changed your mind in any way about it?