For many, buying a franchise offers an appealing way to start a new business. Unlike a typical startup, a franchise usually comes ready-made with a successful business model already in use. But one of the more common misperceptions about buying a franchise is that it is a guarantee for success. Even with all the benefits that come with a franchise, there are still risks to consider before buying one. To avoid future regrets, you should do your research carefully, taking a close look at all of the pros and cons before deciding whether a franchise is right for you.
Pros of Franchising
A quality franchise opportunity offers a range of real benefits for business owners, including:
Perhaps one of the most valuable benefits is the established brand name you’ll adopt – and the existing customer base that comes with it. When consumers are already loyal to a brand, it is easier to encourage them to buy from you.
Another highly valuable benefit of a franchise is the business support and training you may receive. A big part of why franchises are successful is that they have standardized, replicable systems. Many franchisors offer extensive training and ongoing business support with everything from hiring personnel to help with marketing materials.
Because of their size, franchisors can form advantageous relationships with suppliers and service providers, greatly improving a franchisee’s access to reputable vendors at preferential pricing. The enhanced buying power of a franchise organization often benefits franchisees by offering important assets and services at a reduced cost.
A good franchisor will continue to develop new products or services, as well as manage system upgrades, new technology integration, and more. As a franchisee, you can focus on your own operations and leave these development aspects to others.
Cons of Franchising
Like all business opportunities, there are some limitations with franchising, so consider the following before buying a franchise.
Limited Flexibility and Creativity
Due to the standardization that makes a franchise work so well, most franchise contracts have very specific standards that franchisees much follow. Alterations or additions to the business model or brand are often not allowed, especially in the first few years. When you contract with a franchisor, you agree to use their system and no others. However, this should also be seen as a strength in that all franchises are sticking to the same systems and branding guidelines, which results in a strong presence for all.
Reliance on Franchisor Success
A franchise is an interdependent relationship, which means that your business is only as good as the franchisor’s. Any problems or difficulties that the franchisor experiences will probably have a direct impact on you and your business. As such, you should look for a franchise opportunity with a proven track record.
Ultimately, it is important to know all of the pros and cons that come with buying a franchise so that you can make the decision that is right for you. It is also important to compare franchise opportunities to each other to find the ones that would best work for you. If you’ve considered buying a franchise, we invite you to take a look at the Real Property Management franchise. The property management industry continues to grow, which means we need more qualified professionals like you to join our franchise family.