Buying a Franchise

What You Get From Buying a Franchise
There are some things that you can only get from a franchise that would not be available if you were buying an existing business.

Some of these include:

  • Reduced risk.
    There is less risk with owning a franchise compared to owning a business. This is because a franchise generally has many other Franchisees aboard and the operation has been tested and tried over the years to where the operation has become successful. An existing business is basically on its own and has not necessarily achieved this type of development.

  • Systems are ready to go.
    A franchise provides a complete system which includes accounting, training, method of operation, pricing, costing etc. These are all contained in the franchise manual.

  • Costs are less.
    Most franchises would have an advantage in reduced overheads and other promotion costs. This comes about because some costs can be shared between the groups. This is not available in an existing business.

  • Better recognition.
    A franchise usually has better recognition by customers and clients because of the promotion and exposure the franchise group would have established. An existing business is on its own and would not have spent the same type of promotion money to advertise its name and services.

Your Reasons for Buying a Franchise

  1. You want to use your business skills and experience.
  2. You want to use your savings or money that you have received from redundancy.
  3. You want to have something that you can have full charge over.
  4. You are looking at having a change of career from working for a boss.
  5. You are looking ahead and want to build a retirement nest egg as well as provide for the future of your family.

Your Reasons for Not Buying a Franchise

  1. Your age. You may be getting on in years and feel that the heavy and strong requirements of the franchise could be too much for you.

  2. You want to retire. You may simply, after looking at the franchise, decide it is too much work and want to have a break.

  3. You do not want to have full control. You are used to working for a boss and the responsibility of having full control of an operation does not interest you.

  4. You want to be the boss. You may want to run your own show with full independence and find that under the franchise system this is not possible.

  5. You want to make a profit quickly. It is possible that your franchise would take some time to develop and therefore unable to generate cash for you immediately. This may not be suitable to your circumstances.

  6. It costs too much. You may find, at the end of the day, after weighing up what you are getting and the lack of independence as well as the heavy compliance requirements, the overall cost you have to pay is too much.

  7. Some franchises do not work. You have heard stories of franchises which fail and find yourself in a situation of not being prepared to take that risk, especially if you are outlaying a lot of money to purchase the franchise business.