Why Franchise Have Higher Chances of Success?
Based on studies, it is said that franchise businesses have high success rates. Established business model, leverage with the suppliers, tested marketing plan, and full support are some of the reasons why franchise businesses are more successful. The increased probability of success outweighs the disadvantages like royalty fees that are paid monthly.
If you are thinking about choosing to start your own franchise or you are a novice entrepreneur, it is a good idea to do a research first and learn the pros and cons of this kind of business. Remember that franchising is a script for business and not for success.
A lot of would be entrepreneurs have created start-up companies that have failed miserably. Only a few have struggled to survive in the competitive world. It is a well-known fact that businesses belonging to franchises are more likely to become successful than stand-alone businesses. The reasons for this are the following:
It has established business model. When you enter into a franchise business, you will no longer have to develop your own business plan and model. Franchisors have already done the researching, developing, and testing part. This means that the franchise has already established itself. So if you want to go into a franchise business, the risk of you failing is very minimal.
It has collective leverage with suppliers. A business franchisor will make sure that all its franchises are supplied with uniform quality of raw materials and services to ensure quality. If the business franchisor has a lot of franchises, they will have leverage with their suppliers since they are purchasing the supplies in bulk. This collective buying power of business franchisors may allow them to dictate how much they are willing to purchase raw materials and services. With lower prices of raw materials, franchises will have an advantage over their competition in terms of pricing their products and services.
It has established brand and marketing plan. A large business franchisor would have a lot of franchises or branches in different locations. For this reason, it has already built a campaign to boost their brand awareness. This makes it easier for people to recognize the franchise’s brand. When you set up an established franchise, people will recognize it. This means that your newly opened franchise will already have an existing customer base and would easily get potential customers.
It has start-up and grand opening support. In case you don’t have any experience with starting a business, you will be able to get a help. The franchisor will make sure that all its franchises will get the proper pre-opening training and support that they will require ensuring consistency in the products and services. When the time comes to open the new franchise, the head office will also make sure that you will get all the advertising, financial and marketing support to make your grand opening a spectacular event that can draw more customers.
It has guaranteed long-term support. Business franchisors will give regular trainings to franchise employees and management to make sure that they remain open and successful.
Are franchise businesses more successful than independent businesses? The answer lies on the entrepreneur. He or she will rely on the support of the franchisor and experience of other franchisees. There are many other reasons that will give anyone interested in the business model an edge.
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