6 Major Reasons to Buy a Franchised Business
It is the dream of many to own their own business. One of the things on a bucket list. Many of us “played shop” as kids, but when the time comes to put that bucket list into practice, what business do you choose?
Do you start from scratch? Do you set up a shop or a serviced business in your area of expertise? Or do you buy a franchise?
When my time came, I had just turned 40. The time when many people make a lifetime change. I was an accountant, but at my age it was too late to go into private practice so what type of business was I going to buy?
I looked at all the local retail businesses for sale but what were they really selling? Did I have all the skills needed to run the business? When I thought about it, I would have to learn not just one new skill but many. A whole new set of skills in fact, marketing, sales, merchandising, stock management, human resources, that’s when a franchised business looked a better option for me.
Buying a franchised business does mean that right from your very first sale you will have to pay a royalty or franchise fee to your franchisor, but here are just six things that you get in return for this fee:
1. Proven business model
Every franchisor will have at least one company store under their control. A store where they can demonstrate their business model and trial new products. This store will be their flagship. The store they will train you in so that you can start right from the beginning with knowledge of operations, product and what your customer wants. This is a huge advantage when starting your own business.
2. Staff management tools
Running a team of staff is a mammoth job. You need position descriptions, training manuals and uniforms. Well your franchisor has done all this work already. The position descriptions just need to be downloaded. The training program is written and all modules have been prepared you just have to implement. And as for the uniforms, all you have to do is place your order and pay for it. That is a huge job done right there.
3. Stock Management
When putting together your stock list or pantry list, again it’s all done. In the case of a food franchise all the recipes have been refined, the procedure lists prepared, products sourced and the distribution chain organised. But the real advantage is that the menu is costed out so that you know what profit margin you are aiming for right from the beginning.
For me, this is the biggest advantage. Imagine having your own marketing department. One that has your marketing calendar all planned out. The campaigns ready to roll out at the right time and all you have to do is open the package and implement. Gold!
5. Operational support
When starting your business there are many areas to refine, equipment to buy, processes to learn. Buying a franchise means that the franchise fee you paid bought you an operations manual. All ready for you to put into practice as well as having your own support person to help you implement it. How easy!
6. Network of like-minded business owners
For me this was the absolute best reason to own a franchised business. I instantly had my own network of people who understood what I was going through. Being a business owner is a lonely and unique job. Having a network of people in the same brand and business means that support from someone who is going through the same things as you is always just a phone call away.
Buying a Franchised business is a shortcut to entering business. It comes with some guarantees but you still need to do extensive due diligence before signing a franchise agreement. But buy any business and you will need to do due diligence. Buying a franchise means that you are buying into a network of experience and support that does not come when you start your own small business from scratch.
“The opinions expressed by Smallville Contributors are their own, not those of www.smallville.com.au"
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