Entrepreneurs look for opportunities to create enterprises for profit. Some look for existing businesses, and others consider starting a new business. Regardless of their choice, they must beat the competition. There are many ways to beat the competition, but the less expensive way is with a franchise.
What is a Franchise
A franchise is a business that offers its brand name and products to other businesses. Since the franchise collects a license fee, the entrepreneur has an existing business for a minimum investment. The franchiser has expanded it market into a new territory, and the franchisee is ready to make profits.
Businesses that can be replicated are suitable for franchises. Chain stores, restaurants and tax preparers are good examples of businesses that are good franchises. People traveling in unfamiliar cities will ask for directions to McDonalds or Burger King. Others needing tax help might ask for the nearest Liberty Tax franchise business.
Advantages of the Franchise
- Brand Name
Depending on the franchise, the brand name may be recognized internationally. If the reputation is worldwide, the franchisee benefits from the name recognition. A logo will be recognized as soon as prospective customers see it.
Although advertising is a large of percentage of expenses in most businesses, the franchisee keeps advertising at a minimum. The national advertising of the brand product drives customers to the franchise without expense to the franchise. Having a prime location is not as significant with a franchise as it is with other businesses.
A good franchise maintains a good reputation. There may be a few franchisees who ruin the reputation of the franchise, but they are weeded out. The franchise cannot exist for a long period without maintaining its reputation. Most travelers will be drawn to the best franchises.
Since the franchiser wants each franchise to succeed, they are available to support the franchisee at all times. They train the beginning franchisee in every phase of the operation. They offer continuing education, special alerts and online support.
Challenges of a Franchise
- Working with franchisers and following their guidelines
- Hiring and retaining reliable managers and employees
- Finding capital for expansion
Franchises offer the same opportunities as sole proprietorships, but there is less freedom in decision making. Investment and advertising expenses are minimal,
And there is maximum support for success.