5 Benefits of Opening a Franchise
Franchising began to thrive after the passage of the “Lanham Act”. It allowed the sharing of a brand provided that the brand owner was the supreme controller of the goods and services offered. Most people have no clear picture of it despite its benefits to the economy. Franchising is the merging of two different and independent companies sharing a common brand. A franchisee uses the opportunity of the brand given by the brand owner and develops their own locally owned business.
There are many benefits that come with opening a franchise business.
Brand Recognition
Franchising always comes with a name that people are familiar with. The people usually trust and are aware of the goods and services that the brand offers. Name recognition goes a long way. Customers will generally go to a name that they have heard of over a brand-new business. It can be hard to get customers that recognize your brand as a new business but franchising makes it easier for you.
Advertising and Marketing
The owner helps in advertising and marketing about the business. It does this through broadcasting on radio, TV and other online platforms. Most of the implementation of marketing and advertising strategies will be done by the franchise and just a small amount of resources and time is required from you. The brand owner will also guide you on how to market your own products and services. They also may give a marketing plan. This plan may contain marketing strategies, sales forecasts, budgets, and market analysis.
Easy Access to Funds
The main challenge of getting a franchise is usually its cost. Though the prices vary, they are usually huge investments. Additionally, there are some more expenses required in the startup. The process of getting a loan to start up a business is never a walkover. The SBA loans, for instance, are usually recognized for its best standard in business loans. However, they require some eligibility standards. The good news is that SBA reserves some part of its loan specifically for franchises. This then becomes easier for a franchisee rather than seeking for the loan under an independent startup business.
Training Programs
The franchise usually helps in the training of its employees. It then shows them exactly how to do the work that it intends to do. This will improve the quality of goods and services offered by the franchise in all locations. This is usually very important as it determines the success of the franchise because consistency is crucial. You will get help with the training of new employees to make them familiar with the ongoing business so that it stays on par with the overall brand.
Increased Purchasing Power
The big businesses are usually highly privileged in their influence in the market which also influences purchasing power. Smaller newcomer businesses usually have more trouble. The brand owner can purchase large amounts of equipment and inventory to its small brands. This will reduce costs as the franchise will purchase valuable assets on your behalf at a low price.
Franchising is a great opportunity to grow financially. It is a worthy investment when done in the right way. Franchising is an excellent opportunity because you are able to build a successful business without the struggles that new businesses have to often undertake. Franchising is also of great importance to the customers. They purchase with confidence since the business is familiar. Franchising achieves the American dream of independent business ownership.
