You want to start your own business, but fear the risks. Franchising could be your answer.
The spirit of entrepreneurship has ignited the global economy. Many young professionals enter the job market eager to build a business from the ground up. But there’s an inherent risk in starting your own business, one that often makes the entrepreneurial dream seem unattainable.
For many potential business owners, particularly young professionals, franchising offers a solid middle ground — the ability to grow a business with the support, experience and guidance of an established, proven brand.
Many may immediately assume the opportunity to franchise is limited to food services. But there’s a franchise opportunity for almost any industry you can think of. Before dismissing franchising as an option, weigh all the factors.
You may be surprised that compared to the alternatives, franchising can offer a lot to the entrepreneurial-minded:
1. Franchising removes some of the financial risk associated with starting a business
The single biggest benefit for any franchisee is the ability to use proven systems and business best practices from a franchisor. Independent business owners can make costly mistakes, repeatedly, when attempting to build a business without proper support or guidance.
Partnering with a franchise system gives entrepreneurs a leg up by providing a roadmap of effective tactics that’ll save time and money along with providing access to a network of other business owners who’ve faced similar challenges.
2. Franchising provides a thorough business plan
Franchise systems are required to provide a franchisee with a Franchise Disclosure Document (FDD). This document details all startup costs, ongoing costs and financial representations of current franchises within the system.
In essence, the FDD serves as a business plan and allows you to accurately project your business success. Without a FDD, a new business owner is forced to make educated guesses, with minimal if any foresight into the costs of doing business.
A franchise, however, allows you to review a brand’s previous success in other markets so you can have a true picture of your profit potential.
3. Franchising offers education and hands-on experience
When you have no prior experience building a business, you often operate under a “learn as you go” mentality. But a franchisee has the opportunity to learn from industry and product experts from day one.
As a franchisee, you can expect to undergo extensive training programs designed to take your franchise from planning stages to grand opening. Oftentimes, corporate training is ongoing and continues well beyond the startup phase. Annual conferences, weekly webinars and periodic site visits provide every franchisee with fresh perspectives on their business and support when needed.
4. Franchising is backed by the marketing support of a larger brand
Many “mom and pop” businesses have a difficult time building brand awareness within a community. With a franchise, the franchisor is responsible for building a regional or national brand awareness program.
Franchisees inherit this marketing department, which provides big-brand support to establish messaging to promote a new franchise. This brand building process results in added value for your business and can be helpful if you ever decide to sell.
The bottom line is simple: Franchising offers the ability to build your own business within the framework of success. (Click here to tweet this thought.) As young professionals enter the job market eager to build a business from the ground up, franchising offers a lower-risk opportunity for the entrepreneurial inclined.
While there’s always risk in starting a business, franchising provides more financial security, a comprehensive business plan, built-in mentorship and marketing support. For many potential business owners, this is why franchising offers the best of all worlds and creates an environment for continued success.
Ron Holt is the CEO of Two Maids & A Mop, the fastest growing residential house cleaning business in the U.S., which uses a proprietary “Pay for Performance” compensation model.