What are the chances of franchise success?
Running a franchise means you have follow a proven business model. Some many say it’s following “the rules” but in reality there are “rules” to ensure success. The truth is you have a much higher chance of success with a franchise than you do with starting your own business.
Roughly 90 per cent of all new franchisees succeed, while only 15 per cent of new entrepreneurial ventures work out. In today’s economy the failure right is alarmingly high, and there are a lot of reasons why a business might fail. Going the franchise route, however, avoids many potential pitfalls. Here’s why franchising has such a high success rate.
It’s a readymade business
When you buy a franchise, you’re buying a proven business model that has been tweaked and adjusted throughout the years by scores of industry pros. You can be sure that the business you’re buying is one that works, and that they have already demonstrated a demand for their product or service. This is unlike starting a new company where your business model would just be in its infancy, and likely need to be revamped many times before reaching perfection.
You get access to continual support
With a new business, you have no support network to help you out when things get tough or shine a light into the darkness when you aren’t sure what to do next. This is not so with a franchise. Franchisees have the peace of mind of knowing that they have seasoned training and marketing teams at their back, and they can also contact head office or the support department if they ever need to. This support structure is a tremendous help to a new business owner as it can take a lot of the stress out of things.
You get brand recognition
Opening a franchise means you’re starting off with a brand that is already recognized. All the marketing has been done before, so the public already knows what your company offers and you’ll have a customer base from day one. When starting a new company that no one’s ever heard of, you’ll have to spend a lot of time promoting your brand and making it rise above the competition somehow. This can be tough, and involves a lot of hard work.
Locations are found for you
Any real estate agent will tell you location is everything, and it can be just the thing that can make or break a business in some cases. Franchisors have dedicated teams sussing out prime real estate locations and acquiring them for potential partners. This takes a great load off of you because when starting a new business finding a good location can take months.
There is no question that going the franchise way is a much surer route to success than doing it yourself. There are, of course, many fees and royalties to pay with franchising, but when taking into account all the benefits and the higher chance of success, most would agree it’s worth the investment.