Owning your own franchise business is a way to generate a substantial income depending on where you choose to operate your franchise and the types of services or products you are selling. When you own a franchise, there are both pros and cons to making the investment that should be factored in before you make a decision on whether or not the option is right for you.
The Advantages of Owning a Franchise
When you invest in a franchise you want to operate, most often you are always given an entire formal training program to understand how the business works, how to train employees and even how to work the actual system that is already in place and standard for all owners of the same franchise.
Franchises often provide an entire system for keeping track of earnings, orders and employees which is required to be utilized to keep the franchise as consistent as possible, regardless of your location.
Advertising and marketing plans are also provided for you, allowing you to save on the costs of investing in campaigns yourself while still reaching a new audience and promoting the type of food or additional products you have to offer.
If you own a franchise, you are more than likely capable of making bulk purchases of food and other products at discounted rates, giving you an advantage over local and independent businesses.
The Cons of Owning a Franchise
One of the biggest cons of owning a franchise is the requirement to abide by the rules of the official founders of the franchise itself at all times. The franchise you invest in may require you to stock specific merchandise or to use a particular tracking system or program to track income and employees. Abiding by the rules of owning a franchise can be discouraging if you are more interested in the creative aspect of managing your own business.
You may also be limited in the marketing and advertising materials you are permitted to put to use within your franchise location, as these are often provided and required to be used by the official headquarters of the franchise.
Reviewing pages of legal documents and agreements is another requirements to become an investor in any type of franchise you are interested in. Legal documents require you to abide by the franchise rules while also reviewing legalities regarding costs, franchisor duties and even any obligations or restrictions you may have in place depending on the type of franchise you have selected.
Relying on a Positive Reputation
If you run a franchise that has been viewed in negative light in the news recently, you may take the fall by producing less sales, regardless of whether your location was at fault or not. Investing in a franchise is a risk when it comes to upholding a positive reputation, as you are also reliable on anyone else who has also invested in the same franchise themselves.
Peter Wendt is a writer & researcher interested in franchises. If you are interested in purchasine a franchise, or if you are considering franchising your own business, Wendt recommends visiting with John McDuff, an experienced business lawyer in Austin.
Buying a franchise is a major step towards investing in your future. You want to be absolutely certain that the franchise you buy into is one you can afford, continue to reinvest your profits in, and still make a profit from. If you don’t make enough to do all of the above, you won’t have [...]
When you decide to run your own business there are usually two options available; either to buy or start an existing business, or choose a franchise model. Both franchising and non-franchising business models offer their own advantages and disadvantages, and what you decide to do will largely depend on your own skills, aptitudes, preferences and [...]
You are interested in a couple of franchise opportunities. You go to a franchise expo, then you ask around and get pitched by franchisors about the prospects of their franchise business and franchising as a whole. You read advertorials, reviews and almost anything about franchising. You think you are ready. But wait. From my own [...]
Did you know my number one mistake in franchising, costing me 2 franchise units? That’s right – I jump into franchising because of the potential alone, not because I am passionate about the niche of the franchise. I end up losing both. Indeed, I do my analysis and all – I like the concept and [...]
When it comes to start a small business, people find franchise opportunity as one of the easiest and most lucrative option they can start with. But franchise business is not for everyone. Its not always guaranteed that if someone is successful in taking a franchise, you will be that successful in buying the same franchise. [...]