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Franchising: Could It Make You A Millionaire?

The dream of getting into business for one’s self can be realized a variety of ways, from working at home to opening a store front down town, to buying into a franchise. Franchise opportunities have a number of advantages to the budding entrepreneur.

Considering franchise opportunities

photo credit: Adam Grabek

1) Pre-existing customer-base!

This is a huge benefit to the new business owner and can’t be stressed enough. It is said that the average start-up company will take anywhere from three to five years to build up a customer base large enough to sustain the business. In the case of a franchise opportunity, that customer-base has already been built and waiting for the business owner to take advantage of it.

2) Wholesale purchasing

When dealing with retail, whether it’s clothing, automotive parts, food, or some other aspect of retail, maintaining stock for sale is important. An independent store owner’s wholesale costs will be higher than those of the franchise business owner, because the franchise is able to offer franchise owners lower wholesale costs simply due to volume. Franchise networks can strike deals with suppliers that lower the cost to each individual business owner significantly more than what an independent business owner could get otherwise.

3) Brand name and advertising

Partly in going along with point number 1 above, is the fact that a franchise network generally has an established, trusted brand that people know and are loyal to. Part of starting up a business is the need to develop and promote a brand for one’s company image. This takes time, money, and effort to get done correctly and a franchise network has typically done all the heavy lifting already. The franchise business owner will pay into an advertising fund for the franchise network, but won’t have to shoulder the responsibility completely to get the word out about their business.

4) Turn-key operation

Not everyone who goes into business, has the organizational skills to plan a business from the ground up. A franchise business opportunity has typically done this work for the prospective owner, and “hands them the keys” to a proven formula that makes money for everyone in the network. Turn-key operation typically refers to business processes, purchasing agreements, how employees will interact with customers in initiating, completing and then following up on the sale, hours of operation, etcetera.

5) Exclusive territory

Many business franchise networks work on a territory system, where a salesman purchases not only the business opportunity, but a given territory over which they may illicit business from potential customers. Companies such as technical support services, vacuum sales, water services, etcetera, all work on this territorial system. This guarantees the business owner a certain level of customer-reach without fear of the competition from others in the same network.

6) Support

Without a mentor, or family members who have previously been in the business before, the independent business owner can find themselves scrambling for help when certain situations arise they have never faced before. In a franchise opportunity, the head office often offers very extensive and helpful support, ongoing training for owners and employees, and assistance whenever necessary. The business owner is not alone.

Getting into a franchise business opportunity is a great move for those who want a taste of owning their own business while having a support system in place. The hands-on learning for the business owner in a franchise can be invaluable to other endeavours they may take on down the road.

About the Author: Nick Tubb is a franchising expert, working in the UK with Total Franchise. He explores the options for those looking to make the most of franchising opportunities.

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